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Global stock markets have continued their charge higher in 2025, with the S&P 500 and FTSE 100 both sitting near record levels. While it’s been great news for portfolios, some analysts are beginning to worry that valuations – particularly among big US tech firms – look stretched. If sentiment changes, investors could see a sharp correction.
That’s why I’ve been thinking about defensive stocks. Companies in sectors like utilities, consumer goods, and retail tend to have more predictable earnings because people need their products in good times and bad. They can provide stability when the stock market gets bumpy. While nothing is ‘crash-proof’, two FTSE-listed companies have caught my eye as potentially ‘crash-resistant’ picks worth checking out.
Spectris
Spectris (LSE: SXS) isn’t an obvious defensive stock at first glance. Its share price has seen plenty of volatility, and industrial companies often move with the wider economy. But Spectris makes advanced measurement tools used in industries ranging from pharmaceuticals to electronics. These are high-precision instruments with strong competitive moats, and that gives the company healthy profit margins.
One factor I particularly like is the recurring nature of its revenue. Maintenance contracts, services, and consumables make up a significant chunk of sales, which means the firm continues earning even if new equipment orders slow. That consistency helps explain why Spectris shares have delivered a 144% gain over the past decade, equating to an annualised return of around 9.3%.
Of course, it’s not risk-free. Spectris has exposure to the automotive sector, which can be cyclical. A slowdown in vehicle demand or production could weigh on results, making it less defensive than it first appears.
That said, I think it’s a company investors might want to weigh up, given the combination of recurring income and long-term demand for its products.
Reckitt Benckiser
Reckitt Benckiser (LSE: RKT) is a far more traditional defensive option. The consumer goods group owns some of the world’s most recognisable brands, including Dettol, Durex, Gaviscon, Air Wick, and Cillit Bang. These are products people continue to buy regardless of economic conditions, making its revenue stream steady even during downturns.
The company has delivered more than two decades of uninterrupted dividend payments, growing them at an average rate of 4.5% annually. The yield currently sits at 3.7%, and Reckitt often increases its payout during stronger economic periods. For income investors, that track record is worth thinking about.
That doesn’t mean the business is without challenges. Inflation has put pressure on consumers, with many trading down to cheaper alternatives. This has weighed on Reckitt’s share price and forced management to consider ways of cutting costs to stay competitive. If it fails to do so, its margins could be under more pressure.
Even so, its portfolio of household brands makes it a stock I think investors should consider checking out.
Playing it safe
With stock markets reaching record highs, I think it’s sensible for investors to think about adding defensive names to their portfolios.
Spectris and Reckitt Benckiser both bring different strengths: one with recurring industrial revenues and the other with consumer brands and steady dividends.
Neither is immune to risks but both look like solid candidates to weigh up if markets turn choppy in 2025.
