Geopolitical tensions, cautious interest rate expectations, and a pullback in risk assets have pushed many investors to look more closely at defensives, where utilities, consumer staples, and healthcare stocks often sit. When US stock futures soften and safe haven trades shift, some of the attention tends to move toward companies that are built for steadier demand and lower volatility. This article looks at how the latest headlines around Iran, the Federal Reserve, and commodity prices intersect with that search for resilience, and highlights three stocks from our Defensive Sectors screener that appear positively exposed to the current news flow.

Encompass Health (EHC)

Overview: Encompass Health is a US based healthcare provider that runs inpatient rehabilitation hospitals, using therapy, nursing care, and technology to help patients recover function and independence after major events such as stroke, brain and spinal cord injuries, complex orthopedic issues, and serious cardiac or pulmonary conditions.

Operations: Encompass Health generates all of its US$6.1b in revenue from inpatient rehabilitation services in the United States.

Market Cap: US$10.6b

Encompass Health stands out in the current risk off mood because its business is tied to medically necessary rehabilitation, which tends to be less sensitive to geopolitical shocks or interest rate headlines. The company is growing its hospital footprint through new openings in Georgia, Idaho, Pennsylvania, Tennessee and West Virginia. It is also refinancing debt and running a buyback, which together point to a management team focused on long term efficiency and capital discipline. At the same time, investors need to keep an eye on high debt levels, ongoing labor shortages and heavy spending on new facilities, all of which could pressure returns if conditions change. What that mix of resilience, growth projects and balance sheet complexity really means for Encompass Health is where the story gets interesting.

Encompass Health’s hospital expansion and buyback program point to a broader story about capital discipline and growth potential, but the real signal may sit in the 5 key rewards and 1 important warning sign

Northland Power (TSX:NPI)

Overview: Northland Power is a Canadian power producer that owns and operates offshore and onshore wind farms, solar projects, natural gas plants, and battery storage assets, selling electricity under long term contracts to utilities and large customers in several countries.

Operations: Northland Power generates most of its CA$2.55b in revenue from International Offshore Wind at about CA$1.27b, with additional contributions from Americas Utilities at CA$373.9m, Americas Natural Gas at CA$370.0m, and Americas and International Onshore Renewables and Storage together at about CA$531.0m.

Market Cap: CA$5.6b

Northland Power sits at the intersection of two things investors often look for when markets turn cautious: contracted cash flows from regulated or long term power purchase agreements, and exposure to energy transition assets such as offshore wind and grid scale storage. Recent Q1 2026 results show revenue of CA$776.97m and net income of CA$88.62m, while monthly dividends of CA$0.0600 per share continue, although current payouts are not well covered by earnings, which introduces some risk. High debt and the heavy capital bill for projects like Baltic Power and Hai Long mean interest rates and execution really matter. At the same time, those projects and new storage assets could reshape the earnings profile if things go to plan.

Northland Power’s contracted cash flows and energy transition projects could be masking a very different risk reward profile from what the share price implies, so it is worth reading the full 2 key rewards and 2 important warning signs

Cencora (COR)

Overview: Cencora is a global pharmaceutical distributor that connects drug manufacturers with hospitals, pharmacies, clinics, and specialist physicians, while also providing services such as clinical trial support, data analytics, logistics, and inventory management across the healthcare supply chain.

Operations: Cencora generates about US$296.6b in revenue from U.S. Healthcare Solutions and US$31.9b from International Healthcare Solutions, with a small net contribution from segment adjustments and intersegment eliminations.

Market Cap: US$57.7b

For investors looking at defensives while geopolitical tension and rate uncertainty keep risk appetite in check, Cencora offers an interesting mix of scale, earnings momentum, and balance sheet risk. The company sits at the heart of drug distribution and specialty services, with recent quarterly sales of US$78.4b and net income of US$1.6b, and is backing that up with a US$2.0b buyback and steady dividends. Earnings growth has been strong and the stock is priced below some estimates of fair value, yet margins are thin, leverage is high, and newer leadership, including a new CFO, is still bedding in. How those positives and risks net out for Cencora in a risk off market is where the opportunity and the debate really starts.

Cencora’s scale and earnings story may be masking the real turning point for the stock, and the analyst forecasts for Cencora could show whether that strength offsets thin margins and leverage in a way the market has not fully priced in yet

The three defensives covered here are just a starting point, with the full Defensive Sectors (Utilities, Consumer Staples, Healthcare) screener surfacing 23 more companies that pair lower volatility profiles with health and dividend characteristics that could matter when markets turn cautious. Use Simply Wall St to identify and analyze the specific catalysts, contracts, balance sheet traits, and dividend patterns that fit your own risk profile, so you can focus on the highest conviction ideas across defensives.

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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.