When markets get choppy, investors tend to crowd into the same safe places. That can mean defensive consumer staples stocks. These companies sell what people need, no matter what’s happening in the economy. They’re the financial equivalent of comfort food—dependable and familiar.
However, although there’s some evidence of sector rotation, not all defensive stocks have been winners. Walmart Inc. (NASDAQ: WMT) is a clear winner in the defensive trade. WMT stock is up 23.8%, outpacing the market, but it’s trading at a premium valuation at around 39x earnings.
