Geopolitical shocks in the Middle East and a fresh closure of the Strait of Hormuz are putting energy markets back in the spotlight, and that can ripple quickly through portfolios heavy on growth and cyclicals. When volatility picks up, many investors look more closely at reliable cash flows and dividends from larger, established businesses. This article focuses on three stocks from a Defensive Dividend Stocks screener, each with meaningful exposure to the current news flow, and explains how the latest tensions could matter for their risk profile, income potential, and role in a long term, income focused allocation.

Otter Tail (OTTR)

Overview: Otter Tail is a US utility and industrial group that supplies regulated electricity across Minnesota, North Dakota, and South Dakota, while also running manufacturing and plastics businesses that make metal components, thermoformed products, and PVC pipe for a wide range of end markets.

Operations: Otter Tail generates most of its revenue from its Electric segment at about US$582.9 million, with additional contributions from Plastics at about US$408.4 million and Manufacturing at about US$322.4 million.

Market Cap: US$3.7b

Investors watching the latest Iran driven oil shock may find Otter Tail interesting because it combines a large regulated electric utility with industrial and plastics earnings that are directly exposed to resin pricing and global energy markets. The utility segment provides regulated cash flows and an established dividend, while recent earnings guidance and grid investment plans indicate ongoing capital deployment into transmission and renewables. Against that, high debt, free cash flow pressure on the dividend, and lingering PVC pipe antitrust settlements funded from cash all add important risk checks. The key consideration is how this mix of stability, legal overhangs, and energy linked plastics pricing could reshape Otter Tail’s income profile as conditions change.

Otter Tail’s mix of regulated utility income and energy sensitive plastics earnings could be masking where the real pressure and upside sit in its cash flows, so it is worth scanning the 2 key rewards and 3 important warning signs (1 is major!)

STERIS (STE)

Overview: STERIS is a healthcare equipment company that helps hospitals, pharmaceutical manufacturers, and life sciences customers prevent infections by supplying sterilization equipment, procedure room systems, cleaning chemistries, and related services around the world.

Operations: STERIS generates most of its revenue from Healthcare at about US$4.2b, with additional contributions from Applied Sterilization Technologies at about US$1.1b and Life Sciences at about US$588.8 million.

Market Cap: US$19.7b

STERIS stands out in a period of Middle East driven energy shocks because it sells essential infection prevention equipment and services that healthcare systems tend to keep buying through economic cycles. The company also pays a regular dividend and is running a US$1,000 million share repurchase program. Earnings growth has been solid, supported by expanding consumables and service revenue that can smooth out lumpier equipment orders. However, investors still need to weigh tariff pressures on metals, modest forecast returns on equity, and signs of insider selling. With guidance pointing to mid single digit revenue growth and higher earnings, STERIS offers a mix of resilience and growth that income focused investors may want to understand in more depth before deciding where it fits in their portfolio.

STERIS’ steady consumables and service earnings, plus that US$1,000 million buyback, suggest a story many investors may not have fully pieced together yet. The analysis report for STERIS might highlight a crucial twist you have not considered yet.

EBOS Group (NZSE:EBO)

Overview: EBOS Group is a large Australasian healthcare and animal care distributor that supplies pharmacies, hospitals, clinics, and vets with medicines, medical devices, software, and pet products, earning much of its income from long term contracts and recurring orders.

Operations: EBOS Group generates most of its revenue from Healthcare at about A$12.2b, with an additional A$820.3m from Animal Care.

Market Cap: NZ$4.25b

EBOS Group may appeal to defensive dividend investors because it sits at the center of essential medicine and medical device distribution across Australia and New Zealand, while offering a high estimated dividend yield and exposure to structural trends like aging populations and specialty pharma growth. At the same time, high debt, thin net margins around 1.8%, and dividends that are not well covered by earnings or free cash flow mean funding risk and payout sustainability need close attention. The stock also screens as inexpensive against some valuation metrics. This may be of interest if you think logistics upgrades, acquisitions, and efficiency programs can offset margin pressure and recent underperformance. However, the full balance between risk and potential reward is more nuanced than those headline figures suggest.

EBOS Group’s high yield and thin 1.8% net margins hint that the headline income story may be masking something more important in the cash flows, contracts, and debt profile. The analysis report for EBOS Group could reveal where that tension really leads next.

The three dividend ideas in this article are only a starting point, and the full Defensive Dividend Stocks screener surfaces 10 more large cap Utilities, Consumer Staples, and Healthcare stocks with income stories that are just as compelling. Use Simply Wall St to identify, filter, and analyze the exact catalysts and narratives that matter to you so you can focus on the highest conviction defensive dividend opportunities.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.