This article focuses on 15 undervalued defensive stocks for the year 2024. Defensive stocks are known for their stability during economic downturns, outperforming the market in recessionary times. Despite initial predictions of a US recession in 2023, the economy has performed well, with experts now forecasting a soft landing in 2024.
According to reports from Goldman Sachs and JPMorgan, economic growth is expected to be better than anticipated in 2024. Defensive stocks, which include companies with low beta, stable dividends, and slow but steady growth, can help reduce volatility in investment portfolios and provide passive income through dividends. These stocks are often from sectors like utilities, consumer staples, healthcare, and real estate, as they offer essential products and services.
While some defensive stocks have underperformed in 2023, there are still opportunities for long-term investments with lower valuations. Some of the top undervalued defensive stocks for 2024 include Enel Chile S.A., Companhia Energética de Minas Gerais – CEMIG, and BioNTech SE.
The methodology used to identify these undervalued stocks involved screening companies from various sectors based on criteria like price-to-earnings ratio and beta. The list was further narrowed down based on hedge fund holdings and analyst ratings. Companies like Entergy Corporation, Ambev S.A., Bristol-Myers Squibb Company, VICI Properties Inc., Sanofi, United Therapeutics Corporation, CVS Health Corporation, Albertsons Companies, Inc., Public Service Enterprise Group Incorporated, and GSK plc are among the top undervalued defensive stocks for 2024.
These companies operate in sectors like utilities, healthcare, consumer staples, and real estate, offering investors opportunities for potential growth and stability in the coming year.