After a decade of partying for growth shares, the turbulence over the last 18 months has really taught investors a valuable lesson.
It is that defensive stocks are not to be laughed at, and they have a valuable role in every portfolio.
In those heady times when hyper-growth shares ruled, defensives were seen as boring and static.
But it is apparent now that 'defensive' doesn't mean zero growth. It merely indicates an ability to sustain growth during times when the economy — and other businesses — are sinking.
As such, you might want to take notice of these two S&P/ASX 200 Index (ASX: XJO) shares that are rated as buys right now:
'We see quality defensive attributes'
Despite, or perhaps because of, a 17.95% drop in share price over the past 12 months, Baker Young managed portfolio analyst Toby Grimm rates Endeavour Group Ltd (ASX: EDV) as a buy.
"Despite delivering a solid third quarter update in May, this beverage industry leader has fallen below our valuation," Grimm told The Bull.
Endeavour earns its revenue from operating alcohol retailers and pubs.
Historically, alcohol consumption is reasonably resilient through economic downturns.
The signs are pointing up, as far as Grimm is concerned.
"Sales in the hotels and retail divisions grew in the third quarter of fiscal year 2023 when compared to the prior corresponding period."
"Moving forward, we see quality defensive attributes in Endeavour's retail channel."
Grimm is not the only one who sees great things for Endeavour.
According to CMC Markets, six out of 14 analysts currently rate the stock as a strong buy. However, six of the others recommend a sell.
'High quality packaging company'
Industrial giant Amcor CDI (ASX: AMC) is Grimm's other pick, after its share price plunged more than 15% year to date.
"This high quality packaging company has underperformed the broader market by more than 20% in the past 12 months."
He admitted the recent numbers haven't lit the world on fire.
"Net sales decreased by 1% for the three months ending March 31, 2023 when compared to the prior corresponding period.
"However, Amcor's inherently defensive characteristics appeal in the current environment."
QVE analysts last month agreed with Grimm's bullishness despite the poor recent performance.
"While disappointing, the defensive nature of packaging demand means Amcor should be relatively resilient through the impending slowdown in economic activity, while the valuation remains attractive."
