What is a defensive stock?
A Defensive stock is a stock whose profit growth and therefore its price has a very low correlation to the economic activity. No matter how the economy is doing, the revenues, the earnings and the cash flows of the company remain relatively stable and so the share price. Health care, household and Personal Care (HPC) stocks are known as Defensive. Indeed, even though an individual has decreasing revenues, he will not significantly reduce his soap or toothpaste spending.