Better Than Bonds? 3 Defensive Stocks to Consider When Volatility Picks Up

Playing defence can be a solid strategy, particularly in times when investors see trouble on the horizon. I’m on the fence with regards to where things are headed from here, and I’d imagine that’s similar for other investors deciding whether to put capital into defensive stocks, or maintain robust exposure to top growth stocks.

In this article, I’m going to highlight three top defensive stocks to consider right now.

Let’s dive in!

Newmont Corporation

In the world of top-tier gold miners, Newmont Corporation (TSX:NGT) stands out to me as a top opportunity to consider.

Most investors are well aware of the run precious metals have been on in recent years. Indeed, Newmont has quietly turned 2025 into a reset year, exiting higher‑cost mines and integrating Newcrest. These moves have driven record earnings and free cash flow of roughly $7.3 billion for the full year, and $2.8 billion in Q4 alone. That kind of cash generation gives this gold major extraordinary optionality to choose between funding organic growth, paying down debt, and stepping up capital returns even if gold prices cool.

The company’s balance sheet is in excellent shape, evidenced by a current ratio just over 2 times and a very low debt‑to‑equity ratio near 0.17. At the same time, Newmont’s reserve base remains a key pillar of its defensive profile, with roughly 118 million ounces of gold and decades of production visibility ahead. This provides investors with long‑term leverage to any renewed run in bullion.

Thus, for investors looking for a top opportunity in the gold mining space with a low beta and high-quality cash flows, Newmont is a great option to consider now, in my view.

Fortis

In the universe of steady-Eddy companies, Fortis (TSX:FTS) is another top pick of mine.

This largely regulated North American utility continues to grind out mid‑single‑digit earnings growth and dividend hikes in the 4–6% range. Management recently lifted its 2026–2030 capital plan to about $28.8 billion, supporting expected 7% compound annual rate‑base growth through 2030. This rate base growth should provide the foundation for continued earnings per share (EPS) and dividend expansion.

Crucially, at least for defensive‑minded investors, Fortis keeps its payout ratio in a comfortable zone. It’s expected that this year’s dividend will amount to roughly 73% of earnings, well under the 80% line where sustainability questions tend to creep in. Fortis’ balance sheet carries an A‑ credit rating, reflecting stable, predictable cash flows from regulated assets across multiple jurisdictions. This helps dampen volatility when markets get choppy.

Trading around a low‑20s price‑to‑earnings multiple on forward estimates (near what many see as fair value), Fortis is a reliable dividend stock to consider for those not looking to stretch on valuation right now.

Manulife Financial

Finally, we come to another one of my favourite defensive picks right now – Manulife Financial (TSX:MFC).

This is a company that’s been steadily executing, posting repeated earnings beats outside a single soft quarter. Indeed, the past year has seen robust revenue and earnings growth drive solid cash flow growth expectations, driven by robust margins. With nearly one dollar of earnings per share expected in early 2026, I think this is a stock that could be on a trajectory of rising profitability that is not fully reflected in the share price.

The company’s retained earnings climbed to about $1.5 billion as of Q1 of last year, with that number expected to expand significantly this year. This should bolster Manulife’s capital position and support ongoing buybacks and dividend growth.

For defensive investors, Manulife’s diversified global insurance and wealth platform, growing earnings base, and undemanding valuation multiple relative to its earnings power add up to a compelling opportunity to lock in an above‑market yield and modest growth from a financial giant that’s finally starting to earn some respect from the market.

The post Better Than Bonds? 3 Defensive Stocks to Consider When Volatility Picks Up appeared first on The Motley Fool Canada.

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More reading

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• 3 Canadian Utilities Stocks Poised to Win Big in 2026

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.