In this article, we will look at the 5 Best Defensive Dividend Stocks for 2026. For a deeper discussion and an extended list, please see 13 Best Defensive Dividend Stocks for 2026.
5. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 65
On March 5, UBS raised its price recommendation on ConocoPhillips (NYSE:COP) to $144 from $130. It reiterated a Buy rating on the shares. The firm said it continues to view the energy sector as offering an attractive risk/reward profile. The higher target reflects a change in the firm’s oil price outlook. UBS increased its 2026 oil price assumptions by $10 per barrel, now expecting $68 WTI and $72 Brent. The analyst also pointed to a modest expansion in valuation multiples tied to geopolitical risk.
In a research note, the firm said markets may be underestimating the potential for a prolonged conflict in the Middle East and possible disruptions to Qatar’s gas supply. Those risks could push oil and natural gas prices higher. If that scenario plays out, UBS believes companies that produce both oil and gas could see the strongest upside in free cash flow.
ConocoPhillips (NYSE:COP) operates as an exploration and production company. Its Alaska segment focuses on exploring for, producing, transporting, and marketing crude oil, natural gas, and natural gas liquids. The company’s Lower 48 segment includes operations across the 48 contiguous United States as well as the Gulf of Mexico.
4. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 83
On March 3, Piper Sandler lowered its price recommendation on The Cigna Group (NYSE:CI) to $370 from $374. It maintained an Overweight rating on the shares. The firm pointed to the company’s rebate-free pharmacy benefit services model as a key part of its strategy going forward. According to the analyst, the model positions Cigna to comply with the 2026 Consolidated Appropriations Act and meet the terms of its settlement with the Federal Trade Commission. The firm also believes the approach could help reshape public perception of pharmacy benefit managers. In Piper Sandler’s view, these changes reduce risk around the long-term growth outlook for the PBS business and support the case for a higher valuation multiple.
In a Reuters report published on March 3, Cigna also announced that long-time CEO David Cordani plans to retire, a move that caught some analysts off guard as the company transitions to a new business model. Cordani will step into the role of executive chair on July 1. He will be succeeded by Brian Evanko, 49, a longtime executive who currently serves as president and chief operating officer. Evanko has spent three decades at Cigna and oversees the company’s insurance segment, Cigna Healthcare, along with its health services unit, Evernorth.
Cigna is also shifting part of its business model. The company is moving some customers to a structure that removes after-market discounts, commonly known as rebates. Management said the change is expected to pressure margins over the next two years. Cordani, now 60, joined Cigna in 1991 and has led the company as CEO since 2009. During his tenure, the company acquired pharmacy benefits manager Express Scripts in a $54 billion deal in 2018. Last year, it also sold its Medicare Advantage business to Health Care Service Corporation.
The Cigna Group (NYSE:CI) operates as a global health company with two main growth platforms: Evernorth Health Services and Cigna Healthcare. Evernorth includes the Pharmacy Benefit Services and Specialty and Care Services segments, which provide coordinated health solutions aimed at improving how the healthcare system operates and helping people live healthier lives.
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 104
On March 3, BofA analyst Jason Gerberry raised the firm’s price recommendation on Johnson & Johnson (NYSE:JNJ) to $253 from $227. It reiterated a Neutral rating on the shares. The firm said it updated its long-term revenue estimates to reflect new expectations for several pipeline assets nearing the market. Gerberry pointed in particular to Tecvayli and Inlexzo. He also noted that strong data from Tecvayli could have a knock-on effect on Darzalex by extending the duration of treatment.
A few days later, on March 5, Reuters reported that Johnson & Johnson had launched a website that allows some patients in the US to purchase certain drugs directly. The platform is designed for people who do not have insurance or who pay for medications out of pocket. The website, called J&J Direct, currently lists three drugs. These include diabetes treatments Invokana and Invokamet, along with the blood thinner Xarelto.
The initiative is tied to a broader commitment the company made earlier this year. In January, Johnson & Johnson agreed to improve direct access to its medications as part of a deal with U.S. President Donald Trump’s administration. The agreement included plans to lower prices in exchange for exemptions from tariffs. The company has also pledged to invest $55 billion in the United States over a four-year period.
Johnson & Johnson (NYSE:JNJ) operates across several areas of healthcare. Through its subsidiaries, the company focuses on the research and development, manufacturing, and sale of healthcare products. Its operations are organized into two segments: Innovative Medicine and MedTech.
2. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 106
On March 6, Reuters reported that Costco Wholesale Corporation (NASDAQ:COST) said it would lower prices if it received any refunds tied to the US Supreme Court’s decision to strike down President Donald Trump’s emergency tariffs. Costco was one of more than 1,000 businesses that challenged the tariffs in court. The companies argued that Trump did not have the legal authority to impose them under the 1977 International Emergency Economic Powers Act.
Speaking during a post-earnings call, CEO Ron Vachris said it is still unclear if or when companies will receive refunds for tariffs paid last year under the IEEPA. He noted that if Costco does receive any refunds, the company would aim to pass those benefits along to customers through lower prices and improved value. The company has already reduced prices on some products after tariffs were lowered on several countries, including China, following the Supreme Court’s decision. Items affected included textiles, bedding, and cookware.
Costco has also been investing more in its private-label brand, Kirkland Signature. The move is intended to attract shoppers who are looking for lower-priced alternatives to national brands. The company raised its membership fee in 2024 as well. For fiscal Q2 2026, Costco reported quarterly same-store sales growth of 6.7%, excluding gas. That figure came in above analysts’ expectations for a 5.88% increase, according to data compiled by LSEG. Net income for the second quarter increased nearly 14%, reaching $2.04 billion.
Costco Wholesale Corporation (NASDAQ:COST) operates membership warehouses and e-commerce platforms that sell a range of nationally branded and private-label products across multiple categories.
1. Walmart Inc. (NASDAQ:WMT)
Number of Hedge Fund Holders: 114
On March 5, Erste Group downgraded Walmart Inc. (NASDAQ:WMT) to Hold from Buy.
Earlier, on February 26, Reuters reported that Walmart agreed to pay $100 million to settle charges related to earnings for delivery drivers. The US Federal Trade Commission said the company’s actions caused drivers to lose tens of millions of dollars. The FTC, along with 11 states, filed a complaint alleging that Walmart misled both customers and drivers. According to the agency, the company claimed that all customer tips would go directly to drivers. It also displayed inflated base pay and tip amounts to drivers participating in its Spark Driver delivery program.
The FTC said the settlement not only includes the $100M payment but also places restrictions on the company going forward. Under the agreement, Walmart cannot misrepresent potential earnings in delivery offers made to Spark drivers. A Walmart spokesperson said the company has already issued payments to affected drivers and continues to make additional payments when appropriate.
The FTC also emphasized that protecting workers remains a top priority. The agency urged companies involved in gig work to provide clear and accurate information and to maintain strong compliance systems.
Walmart Inc. (NASDAQ:WMT) operates as a technology-powered omnichannel retailer. The company runs retail and wholesale stores, warehouse clubs, e-commerce websites, and mobile apps across several regions, including the United States, Africa, Canada, Central America, Chile, China, India, and Mexico.
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