Safe Australian stocks could be a smart way to invest during this period for investors seeking defensive names for their portfolios.
I don't know exactly how the next 12 months or the next few years will play out, but there is a wide range of possible scenarios with AI, geopolitics and other permutations.
Below are two of the most defensive businesses on the ASX, which I'd happily buy now with $5,000.
Image Source: Getty Images
The Lottery Corporation Ltd (ASX: TLC)
This business operates lotteries and Keno in Australia. It holds the exclusive licence to operate all of Australia's state lotteries, except for Western Australia. The company has distribution arrangements with around 4,000 retail outlets nationally, as well as its own digital channels. Additionally, the company operates Keno in a majority of states and territories, except for Western Australia, Tasmania, and the Northern Territory.
The business tends to have resilient demand for its products, particularly the lotteries. Being able to buy a little bit of hope seems compelling to customers. The occasional price rise helps drive the company's revenue higher over time, while more sales through digital channels are helping increase margins over time.
When broker UBS saw The Lottery Corporation's FY25 result, it forecast that the business could deliver 20% net profit growth in FY26 and grow its net profit by a further 23% between FY26 and FY30. The company's annual dividend is also projected to continue rising in the coming years.
Coles Group Ltd (ASX: COL)
In my view, Coles is one of the most defensive businesses on the ASX. As one of Australia's leading supermarket businesses, the food it retails is essential.
The company's widespread national network, extended opening hours, e-commerce offerings and varied items are attractive to customers.
Coles continues to grow at a pleasing pace compared to Woolworths Group Ltd (ASX: WOW) as it delivers more sales growth. In the first quarter of FY26, the business grew supermarket sales by 4.8% to $9.96 billion. Excluding tobacco, sales revenue increased by 7%.
With defensive and growing revenue, I think the business has a promising future of rising profit when added to the benefits of new advanced warehouses and population growth.
Broker UBS suggests the business could grow its net profit and dividend each year between FY26 and FY30. That's a great outlook for the company, in my opinion.
