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Greenbrier Companies And Other Great Defensive Stocks

A portfolio of defensive stocks is aimed at minimising the risk of capital loss through holding carefully selected companies that are unlikely to perform poorly during tough market conditions. To do this successfully, there are certain fundamentals that you should look for, which include but are not limited to: financial health, liquidity and reliable earnings capacity. Characteristics like this are present in Greenbrier Companies, S&T Bancorp and Nucor below.

The Greenbrier Companies, Inc. (NYSE:GBX)

The Greenbrier Companies, Inc. designs, manufactures, and markets railroad freight car equipment in North America and Europe. Started in 1974, and now run by William Furman, the company employs 11,917 people and with the company’s market capitalisation at USD $1.63B, we can put it in the small-cap stocks category.

GBX has a robust financial position , with long-term commitments covered by cash and short-term assets at a ratio of 2.2x. Its operating cash flow position also reached a solid 33.10% of total borrowings, creating greater safety for investors in a fickle market. Moreover, as its price gives it a US$1.63B value on the market and a PE of 10.3x, sufficiently greater liquidity is offered at a good price relative to the market, enabling the stock to better withstand selling pressure during market downturns. The past 5 years show the company has grown earnings by 25.60% annually and recorded a ROA of 7.20% over the previous twelve months (compared to the industry’s 5.77%), showing GBX holds many of the keys to avoiding the potentially destructive forces of a bear market. Dig deeper into Greenbrier Companies here.

NYSE:GBX Income Statement Jun 4th 18
NYSE:GBX Income Statement Jun 4th 18

S&T Bancorp, Inc. (NASDAQ:STBA)

S&T Bancorp, Inc. operates as the bank holding company for S&T Bank that provides retail and commercial banking products and services. Established in 1902, and now led by CEO Todd Brice, the company currently employs 1,080 people and with the stock’s market cap sitting at USD $1.60B, it comes under the small-cap category.

STBA has a robust financial position , with the majority of liabilities made up of low risk funding such as deposits which account for 88.17%. Additionally, of the lending they do engage in, only 0.37% fail to deliver on their initially expected yield, providing greater comfort for investors that the company is well-grounded if equities become out of favour. Moreover, as its price gives it a US$1.60B value on the market , more buyers and sellers exist for the stock than there would be if it were smaller, helping curtail the rate of decline in share price during periods of mass selling. With positive annual earnings growth of 12.92% over the past 5 years and an industry-beating trailing 12-month ROA, STBA contains many of the valuable traits in a defensive stock. Dig deeper into S&T Bancorp here.

NasdaqGS:STBA Income Statement Jun 4th 18
NasdaqGS:STBA Income Statement Jun 4th 18

Nucor Corporation (NYSE:NUE)

Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. Founded in 1940, and now led by CEO John Ferriola, the company currently employs 25,100 people and with the company’s market capitalisation at USD $20.39B, we can put it in the large-cap category.

At present the company has a strong balance sheet , with long-term commitments covered by cash and short-term assets at a ratio of 1.79x. Additionally, operating cash flow is at a good level relative to overall debt at 24.50%, creating greater safety for investors in a fickle market. Furthermore, at a US$20.39B market cap and a PE of 15.63x, greater liquidity is offered at a good price relative to the market, enabling the stock to better withstand selling pressure during market downturns. As earnings have annually compounded at 10.05% over the past 5 years and last year’s growth was 23.81%, the company has some of the necessary characteristics to maintain value during a cyclical downfall in the market. More detail on Nucor here.

NYSE:NUE Income Statement Jun 4th 18
NYSE:NUE Income Statement Jun 4th 18

For more robust companies to add to your portfolio, explore this interactive list of defensive stocks.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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