Analysts predict a prolonged stock market downturn due to overvalued stocks, economic indicators, and geopolitical concerns. However, this presents opportunities for stock pickers to invest in defensive stocks. One sector to consider is energy, which benefits from rising oil prices. The Energy Select Sector SPDR Fund (XLE) offers exposure to the entire energy sector and provides a dividend yield of 3.09%.
Another defensive stock to consider is Philip Morris (PM), a tobacco and smoke-free product manufacturer with consistent revenue growth. PM’s high dividend yield of 5.55% makes it attractive in the current environment where fixed-income investments are gaining favor.
For investors willing to take on more risk, Intuitive Machines (LUNR) is a promising player in the emerging space economy. Involved in NASA’s Artemis project, LUNR’s technology has been showcased on the moon. Despite its reliance on government contracts, the company has growing revenue, narrowing losses, and trades at an attractive price-to-earnings (P/E) ratio of 2.4x.
