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We just covered the 14 Best Defensive Stocks to Invest In Now and The Home Depot, Inc. (NYSE:HD) ranks 1st on this list.

The Home Depot, Inc. (NYSE:HD) is considered a core defensive stock due to its massive scale, irreplaceable physical footprint, and its essential role in maintaining the aging US housing market. While the stock has faced some headwinds from high mortgage rates, it remains a favorite for low-volatility portfolios. The stock is often treated as a proxy for the housing market, but its defensive strength lies in the fact that it supports the maintenance of existing homes, which is a non-discretionary expense. As of 2026, the average age of a home in the US is over 40 years. Whether the economy is strong or weak, homeowners must spend on essential repairs like plumbing, roofing, and electrical maintenance. During economic slowdowns, while big-ticket remodels might decline, smaller maintenance projects often increase as homeowners focus on preserving their most valuable asset.

The defensive profile of The Home Depot, Inc. (NYSE:HD) is significantly bolstered by its dominance in the professional contractor segment. Through its $18 billion acquisition of SRS Distribution, finalized in late 2024, and recent tech investments in 2026, Home Depot has solidified its moat with professional tradespeople. Professionals have higher spending power and more consistent project backlogs than DIYers. This sticky relationship creates a steady stream of high-volume revenue that acts as a buffer when consumer confidence dips. The firm is also a dividend machine that has paid out for 156 consecutive quarters. In February, the board approved a 1.3% increase in the quarterly dividend to $2.33 per share. The stock yields approximately 2.7%–2.8%.

While we acknowledge the potential of HD 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.

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