The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.

We just covered the 14 Best Defensive Stocks to Invest In Now and Emerson Electric Co. (NYSE:EMR) ranks 7th on this list.

Emerson Electric Co. (NYSE:EMR) has emerged as a premier defensive stock due to its pure-play transformation into a global automation leader. While many industrial stocks are highly cyclical, the company has successfully pivoted toward high-margin, mission-critical software and sensors that are essential for modernizing the global power grid and AI infrastructure. Ovation, marketed by the firm, is a software that manages electricity generation at massive utility facilities and AI data centers. In Q1 2026, Ovation posted a staggering 74% order growth, including a major win to automate a new 1.7-gigawatt AI data center in the US. Once a chemical plant or power grid integrates Emerson’s control systems, the cost and risk of switching to a competitor are prohibitive. This creates a lock-in effect that ensures recurring revenue regardless of the economic cycle.

READ ALSO: D. E. Shaw Stock Portfolio: Top 10 Stocks to Buy.

Photo by Arturo Añez on Unsplash

Emerson Electric Co. (NYSE:EMR) is one of the most consistent income generators in corporate history. In February, the firm declared a dividend of $0.555 per share, marking its 69th consecutive year of dividend increases. The stock currently yields approximately 1.5%–1.6%. While the yield is lower than some peers, it is backed by an exceptionally strong $7.9 billion backlog, up 9% year-over-year, providing high visibility for future payouts. The firm has aggressively de-risked its business by divesting volatile, non-core assets. For example, by spinning off its climate technologies and integrating AspenTech, Emerson has moved toward a model where two-thirds of revenue is expected to be recurring or software-based.

While we acknowledge the potential of EMR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: Israel Englander Stock Portfolio: Top 10 Stock Picks and Billionaire Stan Druckenmiller’s 10 Small and Mid-Cap Stock Picks with Huge Upside Potential.

Disclosure: None. Follow Insider Monkey on Google News.