In this article, we will discuss the 8 Best Defensive Stocks to Buy Amid Geopolitical Tensions.
Strategists on Wall Street are starting to sound the alarm, warning that stocks could fall from recent highs as the second-quarter earnings season ends. The warnings come as equity markets remain at record highs despite ongoing risks, ranging from the Iran war, high oil prices, surging bond yields, and the risk of higher interest rates.
“We’re a little bit concerned that the market’s going to test once earnings season is over in totality,” Nancy Tengler, Laffer Tengler Investments CIO, said. “Then we have a lack of news flow, so the market will turn its attention to the Fed, to the Middle East.”
Given the lack of news after the earnings season, investors are likely to turn their attention to the Fed and simmering geopolitical tensions in the Middle East. “I think you want to be prepared for some sort of correction,” Tengler said.
Citadel Securities’ head of equity strategy, Scott Rubner, shares similar sentiments, insisting the near-term setup in the equity markets warrants a more tactical caution given the risk of a significant correction from the historical highs. Rubner insists the risk/reward has become less asymmetric. Should momentum begin to fade, there is a likelihood of a short-term flow of funds.
Amid short-term concerns, strategists agree that the long-term outlook remains bullish, given that underlying fundamentals remain strong. With that in mind, let’s take a look at some of the best defensive stocks to buy for shrugging off the near-term headwinds while positioning for the long term.
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Our Methodology
To compile a list of the 8 Best Defensive Stocks to Buy Amid Geopolitical Tensions, we used Finviz and Yahoo Finance Screener to identify consumer defensive companies. From the list, we settled on stocks with a low short float of 5% or less on analyzing data in Finviz, yahoo finance and Barchart. We further trimmed the list by focusing on stocks with upside potential of more than 20%. These stocks are also popular among elite hedge funds in Q1 2026. Finally, we ranked the stocks in descending order based on the stocks’ Short Float.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Best Defensive Stocks to Buy Amid Geopolitical Tensions
8. Covista Inc. (NYSE:CVSA)
Stock Upside Potential: 28%
Short Float: 4.58%
Number of Hedge Fund Holders: 28
Covista Inc. (NYSE:CVSA) is one of the best defensive stocks to buy amid geopolitical tensions. On May 7, Covista Inc. (NYSE:CVSA) raised its revenue and adjusted earnings per share guidance for the year after an impressive third quarter of fiscal 2026.
Revenue in the quarter was up 4.5% to $487 million, as total student enrollment increased 6.8% to 100,585, marking the 11th straight quarter of growth. Adjusted net income in the quarter totaled $69 million, or $1.98 a share, a drop from $73.3 million, or $1.92 a share, delivered the same quarter last year.
The solid financial results came as Chamberlain University continued to advance its campus expansion strategy. The university opened six new campuses, with two receiving regulatory approval. Walden University, on its part, expanded student programming heading into the 2026 academic year.
Additionally, Covista raised its full-year revenue guidance from between $1,900 million and $1,940 million to between $1,930 million and $1,945 million, representing 8% to 9% growth. Adjusted earnings per share are expected at between $7.95 and $8.15, representing a 19% to 22% year over year growth.
Covista Inc. (NYSE:CVSA) is America’s largest healthcare educator, operating as the parent company of five accredited academic institutions to address the national healthcare workforce shortage.
7. Darling Ingredients Inc. (NYSE:DAR)
Stock Upside Potential: 26.30%
Short Float: 4.24%
Number of Hedge Fund Holders: 61
Darling Ingredients Inc. (NYSE:DAR) is one of the best defensive stocks to buy amid geopolitical tensions. On May 12, TD Cowen reiterated a Buy rating and a $76 price target on Darling Ingredients Inc. (NYSE:DAR), buoyed by strong margin conditions across the company’s business segments.
The research firm remains confident that the company will benefit from significant margin expansion opportunities rather than volume growth in the current operating environment. According to TD Cowen, there is potential upside of $150 million to $300 million from Feed margin expansion and $80 million from the Food segment.
The research firm also expects Darling Ingredients to generate significant cash flow, which should help reduce debt below target levels by early next year. While the company has yet to shed light on potential capital allocation priorities once debt targets are reached, it is also unlikely to pursue large-scale mergers and acquisitions.
TD Cowen insists Darling Ingredients is its top pick in its coverage universe amid its heightened focus on debt reduction through cash generation.
Darling Ingredients Inc. (NYSE:DAR) is the world’s largest repurposer of food and animal waste. The company takes organic by-products from the meat, poultry, and food industries and transforms them into sustainable ingredients for human food, pet food, animal feed, and renewable energy.
