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.
6. The Kroger Co. (NYSE:KR)
Stock Upside Potential: 23%
Short Float: 4.21%
Number of Hedge Fund Holders: 52
Kroger Co. (NYSE:KR) is one of the best defensive stocks to buy amid geopolitical tensions. On June 3, Jefferies reiterated a Buy rating on Kroger Co. (NYSE:KR) but cut the price target to $80 from $82. The price target cut comes amid concerns that the company is paying the price for US Food channels turning negative in the first quarter.
Kroger’s first-quarter volumes worsened as pricing moderated, with inflationary pressure from higher energy prices taking a toll on consumers’ purchasing power. According to the research firm, higher gas prices are increasingly pressuring consumer grocery budgets, with comparable sales now expected to come in at the low end of the company’s guidance.
Nevertheless, Jefferies remains optimistic about Kroger’s long-term outlook, owing to CEO Greg Foran’s renewed focus on value and market share growth. In addition, the retailer is making strides with its new e-commerce model, which further strengthens its long-term outlook.
Reports indicate Kroger intends to cut prices on thousands of items as it seeks to regain market share from competitors. It is part of a strategy that focuses on savings from tighter sourcing and simpler operations.
The Kroger Co. (NYSE:KR) is one of the largest food retailers and supermarket operators in the United States. It operates thousands of grocery stores, pharmacies, and fuel centers, while also manufacturing its own food products and running digital delivery and advertising networks.
5. Laureate Education, Inc. (NASDAQ:LAUR)
Stock Upside Potential: 24.37%
Short Float: 4.13%
Number of Hedge Fund Holders: 31
Laureate Education, Inc. (NASDAQ:LAUR) is one of the best defensive stocks to buy amid geopolitical tensions. On May 21, Laureate Education Inc. (NASDAQ:LAUR) strengthened its leadership team by electing Julian Coulter as an independent member of the Board of Directors.
Coulter joins the board with a strong combination of marketing leadership, digital expertise, and operating experience, expected to help drive growth and create meaningful long-term shareholder value. Her critical skills and expertise in technological and commercial innovation should benefit Laureate Education during an era of accelerated digital adoption.
The strengthening of the board comes on the heels of a solid first quarter, during which new enrollments rose 9%, and total enrollments rose 6%. Consequently, the company delivered a 15% increase in revenue at $272.6 million. However, the company posted a wider-than-expected net loss of $21.6 million, compared with $19.6 million in the same quarter last year.
Laureate Education, Inc. (NASDAQ:LAUR) operates a global network of higher education institutions, primarily focusing on campus-based and online undergraduate, graduate, and specialized degree programs.
4. Dollar General Corporation (NYSE:DG)
Stock Upside Potential: 33.44%
Short Float: 3.77%
Number of Hedge Fund Holders: 47
Dollar General Corporation (NYSE:DG) is one of the best defensive stocks to buy amid geopolitical tensions. On June 2, Telsey Advisory Group reiterated a Market Perform rating on Dollar General Corporation (NYSE:DG) and a $140 price target, following impressive first-quarter 2026 results.
Total sales in the quarter were up 3.4% year over year to $10.8 billion, as comparable sales increased 2%, in line with expectations. Revenue increased, driven by positive sales contributions from new stores, partially offset by the impact of stores closed.
Net income was up 13.3% to $444.1 million compared to $391.9 million delivered in the same quarter last year. Similarly, earnings per share came in at $2, better than the $1.89 analysts were expecting and up 12.4% year over year. Gross margin improved by 65 basis points to 31.6% at the back of higher markups and lower shrinkage and damage.
Following the impressive first-quarter results, the Board of Directors has approved a quarterly cash dividend of $0.59, payable on July 21 to shareholders of record on July 7.
Dollar General Corporation (NYSE:DG) is a large discount retailer that offers convenient neighborhood shopping for everyday essentials. Operating over 20,000 stores primarily in the United States, it caters largely to budget-conscious consumers by offering affordable food, household goods, apparel, and health and beauty products.
3. US Foods Holding Corp. (NYSE:USFD)
Stock Upside Potential: 26.30%
Short Float: 3.64%
Number of Hedge Fund Holders: 52
US Foods Holding Corp. (NYSE:USFD) is one of the best defensive stocks to buy amid geopolitical tensions. On June 1, Piper Sandler reiterated a Neutral rating on US Foods Holding Corp. (NYSE:USFD) and lowered the price target to $88 from $103.
The price target cut comes amid concerns that the retailer will feel the brunt of weak traffic in the chain-restaurant industry. Consequently, the research firm has reduced its organic case growth estimate while also increasing its discount rate assumption to 8.75% from 8.25% to align with distribution peers.
Amid the concerns, US Foods accelerated its year-over-year independent restaurant case growth in the first quarter as it also gained share with its target customer types. The company also posted a 15% adjusted diluted earnings per share growth of $0.78 amid a deteriorating macro environment. Net sales in the quarter were also up by 2.8% to $9.6 billion.
For the full year, US Foods is projecting net sales growth of 4% to 6%, with adjusted EBITDA growth of 9% to 13%. Earnings per share are also expected to grow by between 18% and 24%.
US Foods Holding Corp. (NYSE:USFD) is a massive food service distributor that supplies food and kitchen essentials to approximately 250,000 locations, including independent restaurants, healthcare facilities, hotels, and educational institutions.
2. Walmart Inc. (NASDAQ:WMT)
Stock Upside Potential: 24.02%
Short Float: 1.86%
Number of Hedge Fund Holders: 99
Walmart Inc. (NASDAQ:WMT) is one of the best defensive stocks to buy amid geopolitical tensions. On June 3, Walmart Inc. (NASDAQ:WMT) took an important step toward enhancing supply chain efficiency across its network to enable Everyday Low Prices for customers.
The company unveiled the Prepaid Consolidation service, which allows suppliers to send products under a single national purchase order to a designated location. In return, the retailer is to merge the inventory before distributing it across its US distribution network. Consolidation of inventories is part of an effort that seeks to enhance transportation efficiency by combining shipments from various suppliers.
Prepaid Consolidation is poised to expand Walmart’s first-mile services for prepaid suppliers without changing freight terms. There will be no additional markups by third-party logistics providers for services provided. The new program should reduce shipment costs while also enhancing the delivery of goods to store shelves.
Walmart Inc. (NASDAQ:WMT) is a multinational retail corporation that operates a massive chain of hypermarkets, discount department stores, and grocery stores. It functions as an omnichannel retailer, allowing customers to shop in physical stores, through e-commerce websites, and via mobile apps for delivery or curbside pickup.
1. RLX Technology Inc. (NYSE:RLX)
Stock Upside Potential: 21.36%
Short Float: 0.54%
Number of Hedge Fund Holders: 17
RLX Technology Inc. (NYSE:RLX) is one of the best defensive stocks to buy amid geopolitical tensions. On May 20, RLX Technology Inc. (NYSE:RLX) reiterated that it continues to capture emerging-market opportunities as part of its international expansion strategy. Likewise, the company is refining its user-first approach through localized strategies and deeper engagement.
The remarks follow an impressive first quarter, during which revenue increased 96.2% to $229.9 million, driven by aggressive international expansion and the acquisition of an entity in Europe. International business accounted for 72.3% of total revenues. Income from operations was up 187.9% to $45 million as net income increased 41.4% to $51.8 million.
Following an impressive first quarter, RLX Technology remains focused on innovative, user-centric products while also strengthening distribution and retail capabilities. The company also plans to deepen its presence in Europe. Backed by a strong balance sheet of $2.1 billion. Additionally, it remains well-positioned to execute the next phase of growth and accelerate market penetration in Asia and Europe.
RLX Technology Inc. (NYSE:RLX) is a global branded e-vapor (vaping) company. It operates in the tobacco industry within the broader consumer defensive sector. They research, develop, manufacture, and distribute a variety of electronic cigarettes, including rechargeable closed-system pod devices, open-system vape products, and closed-system disposable vapes.
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