Why Institutional Money Is Rotating Into These Underpriced Defensive Stocks

With geopolitical tensions rising, energy prices on edge, and inflation keeping central banks cautious, many investors are looking for stocks that might hold up better when markets swing around. This is where Global Defensive Stocks can come into focus, offering exposure to larger companies in traditionally steadier areas such as utilities, consumer staples, and healthcare. Based on a recent news event that is shaking up expectations for trade, monetary policy, and inflation, this article looks at 3 stocks from our Global Defensive Stocks screener that appear positively exposed to these developments.

Danaher (DHR)

Overview: Danaher is a global healthcare and life sciences company that supplies the tools, consumables, and diagnostic systems that labs, hospitals, and biopharma companies use every day to develop drugs, run critical tests, and support patient care.

Operations: Danaher generates US$9.9b from Diagnostics, US$7.5b from Biotechnology, and US$7.4b from Life Sciences (excluding Biotechnology), giving it a broad mix across testing, lab tools, and bioprocessing.

Market Cap: US$144.3b

Danaher attracts attention in volatile markets because a large portion of its revenue comes from recurring consumables and services tied to healthcare and research activity that tends to hold up when economies weaken. Yet the stock is currently indicated as trading at a discount to an estimated fair value and analyst targets. At the same time, the company is exposed to policy risks in China, funding cycles in biotech, and higher debt used to support acquisitions like Masimo. These factors could pressure margins if growth in diagnostics and life science tools slows or input costs stay elevated. For investors, the key issue is how these strengths and pressure points balance out in Danaher’s long term story.

Danaher’s recurring healthcare revenue and discounted share price hint at a story investors may not be fully pricing in yet. See how the DCF valuation analysis for Danaher could reframe the Masimo deal and China exposure.

ResMed (RMD)

Overview: ResMed develops medical devices and cloud-based software that help diagnose, treat, and manage sleep apnea and other chronic respiratory conditions, as well as software tools that support home-based and residential care providers.

Operations: ResMed generates about US$4.9b from Sleep and Breathing Health and US$670.9m from Residential Care Software, with its core business centered on sleep and respiratory therapy devices and related digital platforms.

Market Cap: US$28.7b

ResMed stands out in volatile markets because it sells equipment and software tied to long term sleep and breathing disorders, which tend to require ongoing care regardless of energy prices, sanctions, or central bank moves. The company combines high profitability metrics, including a 27.4% net margin and strong ROE, with a P/E that is below peers. It is also sharpening its focus through moves like the planned MatrixCare sale. At the same time, investors need to weigh freight cost headwinds from geopolitical disruptions, potential pricing pressure from payors, and competition from alternative sleep therapies. How those push and pull factors play out is central to whether ResMed’s defensive profile and growth in connected care justify more attention within a Global Defensive Stocks allocation.

ResMed’s high-margin, recurring sleep care business with a P/E below peers suggests that something in the story is being overlooked. Use the analyst forecasts for ResMed to see whether payor pressure or freight costs change that picture.

Northland Power (TSX:NPI)

Overview: Northland Power is a Toronto based power producer that owns and operates offshore and onshore wind farms, solar projects, natural gas plants, and battery storage, selling electricity under long term contracts across Canada, Europe, and the Americas.

Operations: Northland Power generates most of its revenue from International Offshore Wind at about CA$1.3b, with sizable contributions from Americas Utilities (CA$373.9m), Americas Natural Gas (CA$370.0m), Americas Onshore Renewables and Storage (CA$354.9m), and International Onshore Renewables and Storage (CA$176.1m).

Market Cap: CA$5.7b

Northland Power is attracting fresh interest because it sits at the intersection of energy security and the energy transition. The company has long term contracted offshore wind and utility assets that can benefit when power prices rise and governments prioritize reliable domestic supply. Recent milestones such as first power from the Baltic Power offshore project in Poland and early success in grid scale storage illustrate how new assets could support future earnings, even as current profitability is pressured and the stock carries high debt and a dividend that is not fully covered by earnings. For investors, the key question is whether today’s depressed sentiment toward renewables is masking the potential embedded in Northland Power’s contracted pipeline and global footprint.

Northland Power’s contracted offshore wind and storage projects may be masking more earnings potential than the current sentiment suggests, but the real twist sits inside the analysis report for Northland Power

The three Global Defensive Stocks covered here are only a sample of what is available, as the full screener surfaces 24 more large companies with relatively low risk and volatility scores, solid health profiles, and income potential that could fit the same playbook. Unlock that broader list with the Global Defensive Stocks screener and use Simply Wall St to identify and analyze the catalysts, contracts, and narratives that match your highest conviction defensive ideas.

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Seeking Fresh Alternatives Before Momentum Flies?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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