Political headlines around Senator Susan Collins and the Todd Blanche attorney general nomination have added a new layer of uncertainty for markets, with investors reassessing how potential shifts in Department of Justice leadership could affect risk appetite. In times like this, many look more closely at larger, defensive stocks that focus on essential services and reliable dividends. This article walks through three stocks from a Defensive Stocks screener that appear relatively well positioned in the current backdrop of political and regulatory questions. It explains how each stock is exposed to this news and why some investors might see them as potential stabilisers in a bumpier market.

Elevance Health (ELV)

Overview: Elevance Health is a large U.S. health benefits company that provides medical, pharmacy, behavioral health, and supplemental insurance plans to individuals and public and private sector employers, primarily under the Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon brands. It also delivers pharmacy benefit management, virtual care, care management, and other support services that aim to coordinate care and manage costs across the healthcare system.

Operations: Elevance Health generates most of its revenue in the U.S., with about US$169.3b from Health Benefits and US$74.2b from Carelon pharmacy and services, partly offset by internal eliminations and other items.

Market Cap: US$83.0b

For investors looking for stability while political headlines create more noise around the Department of Justice, Elevance Health stands out as a large health insurer anchored in essential services, recurring premiums, and a 1.82% dividend. The stock screens as relatively inexpensive on a P/E basis compared with many healthcare peers. Management is investing heavily in analytics and AI to support margin stability over time. Recent insider share purchases by the CEO and chairman suggest internal confidence. There are also pressure points, including elevated Medicaid costs, ongoing market exits, and modest net profit margins at about 2.5%. The key question is whether Elevance Health’s technology initiatives and disciplined portfolio adjustments can offset these headwinds and support its positioning as a defensive healthcare stock.

Elevance Health’s recurring premiums and healthcare focus may be masking a deeper story in its margins and capital allocation. Get the full picture in the DCF valuation analysis for Elevance Health.

STERIS (STE)

Overview: STERIS is a healthcare equipment and services company that helps hospitals, drug makers, and research facilities prevent infections through sterilization systems, cleaning chemicals, surgical tables and lights, and outsourced instrument and endoscope reprocessing services.

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$588.8m.

Market Cap: US$22.7b

STERIS gives you exposure to infection prevention equipment and recurring consumables that healthcare providers rely on regardless of political headlines, which can be appealing when investors are worrying about Department of Justice leadership and broader volatility. Earnings grew faster than revenue over the past year, margins sit around 13.2%, and the company has raised its dividend for 21 consecutive years while also authorizing up to US$1.0b in buybacks. On the other hand, the stock trades on a higher P/E than many medical equipment peers, relies entirely on external borrowing for funding, and has seen meaningful insider selling in recent months. The key consideration is whether recurring revenues, rising dividends, and margin resilience are enough to compensate for those funding and valuation risks.

STERIS looks like it could be quietly reshaping its story, with recurring revenues, 13.2% margins, and long-running dividend growth suggesting there may be more under the surface. Get the full context in the analysis report for STERIS

Extendicare (TSX:EXE)

Overview: Extendicare is a Canadian senior care company that provides long term care, home health care, and support services for older adults through facilities, in home nursing and therapy, and management and consulting services for third party operators.

Operations: Extendicare generates most of its revenue from Long Term Care at about CA$937.9m and Home Health Care at about CA$748.3m, with a smaller contribution of CA$64.8m from Managed Services.

Market Cap: CA$3.4b

Extendicare gives you exposure to essential long term care and home care services that tend to see steady demand even when political headlines around the Department of Justice keep markets on edge. Earnings growth has been strong, margins have improved to 7%, and return on equity sits at 31.1%, while the stock trades modestly below one estimate of fair value. At the same time, funding is entirely reliant on external borrowing and there has been meaningful insider selling in recent months, which are important pressure points to watch. The long running monthly dividend, moderate payout ratio, and recent inclusion in major S&P/TSX indices are additional factors that income focused investors may want to examine more closely.

Accelerating earnings, a 31.1% return on equity, and a long running monthly dividend suggest Extendicare’s story is still being underestimated. See how the full narrative for Extendicare could shift once you factor in one overlooked risk and a quiet upside twist.

The three defensive stocks in this article are a starting point, while the full screen highlights 23 more companies with equally compelling stories around steady earnings, dividends, and resilience. To identify and analyze the highest conviction ideas for your own playbook, use Simply Wall St to zero in on the exact catalysts and narratives that matter to you within the Defensive Stocks screener.

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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.