Defensive stocks for a volatile market

Intuitive Surgical's stock remains relatively resilient despite the current market volatility. NRG energy continues to benefit from improved prices, greater network efficiency and the Cut Inflation Act. Defensive actions are helpful in overcoming the current volatile environment.

Market volatility is back in the headlines after the Federal Reserve continued to raise interest rates at its last meeting. The Dow fell below 30,000, joining the S&P 500 in bearish territory. With inflation continuing to climb and employment numbers remaining at low levels, it is almost certain that the next two Fed meetings will produce interest rate hikes of 75 basis points. which will continue to put pressure on liquidity, and therefore on financial assets. Investors may increasingly turn to defensive stocks, with sustainable long-term competitive advantages and consistent cash flows for their portfolio, if they are looking to allocate capital in times of volatility.

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Intuitive Surgical (NASDAQ: ISRG) is an American medical robotics company that designs and manufactures robotic products to improve clinical outcomes. Its most successful product remains the Da Vinci system, which is increasingly finding its way into operating theatres. Medical equipment stocks are well positioned to grow over the next eight years, and the medical robotics market is expected to grow steadily over the same period at 16% per year, by which time it could generate $44 billion. of income. Despite the massive market sell-off, the stock continues to remain buoyant and is currently down 15% compared to the broader market, which is down over 20% on average.

The medical industry on average has better long-term economics. Especially as the global average age increases, more people need medical care. Additionally, the global health industry is increasingly investing in technology to improve medical outcomes globally, which only improves the fortunes of companies like Intuitive Surgical. Global growth should help maintain momentum, especially as China, Japan and Asia remain at the forefront of demand, with growing economies and increasing levels of investment helping them to move from traditional surgical tools to modern devices.

ISRG has seen its sales increase by 16% over the past five years and its earnings per share increase by 17%. In terms of valuation, the company remains expensive with a P/E of 48x and a forward P/E of 33x. And while investors may view these valuations as slightly expensive, the consistency of growth and earnings means the market will continue to attach a premium to the stock. One of the positives of the stock is that it has little to no debt, which means it is unlikely to face any real problems during the current cycle of rising interest rates. Consider the stock if you are looking for a long-term investment, with a company that produces consistent results and stable cash flow.

NRG Energy (NYSE: NRG) is an unregulated energy utility company. Its business revolves around an integrated power company operating across Texas, the eastern and western United States. The company is involved in the generation, sale and delivery of electricity and related products and services to approximately 6 million residential, commercial, industrial and wholesale customers. It generates electricity using natural gas, coal, oil, solar, nuclear and battery storage

NRG Energy is increasingly investing in its smart grid to give its users more control over their energy consumption. But despite his best efforts, prices in the energy sector are on the rise, especially in the residential energy market. NRG energy remains at the heart of the areas where it supplies electricity, which means earnings should be consistent and less volatile than those of other sectors. Earnings continued to be strong in the first quarters, and states such as Texas, where the company does much of its business, experienced an unusually hot summer, which in turn should help drive up earnings over the next two quarters.

The company's valuation remains relatively stable with a price/earnings ratio at 9x, and with the pace at which energy prices have...