Motley Fool CEO Recommends Dividend & Value Plays for a Defensive Stance Today
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The Motley Fool

Motley Fool CEO Recommends Dividend & Value Plays for a Defensive Stance Today

July 27, 2025
05:02 AM
5 min read
AI Enhanced
investmenteconomystockstradingfinancialenergyutilitiesmarket cycles

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Here's what The Motley Fool's CEO, Tom Gardner, thinks investors should do now to beat the market.

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5 min read

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investment

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Published

July 27, 2025

05:02 AM

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The Motley Fool

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Key Topics
investmenteconomystockstradingfinancialenergyutilitiesmarket cycles

The re indicates that It's worth noting that Investors in stock have witnessed historic volatility in 2025 so far

On the other hand, After peaking in February, the S&P 500 (^GSPC 0. 40%) index briefly slipped into correction territory in April

Many feared a market crash, but the S&P 500 has instead staged one of its most dramatic V-shaped recoveries since and just hit a record high

The wild ride has left investors wondering whether the stock market is overheated and whether they should invest in stocks now or remain on the sidelines (noteworthy indeed), given the current landscape

This tells us that fear is warranted

The S&P 500 is currently trading at over 25 times earnings, and U

Stocks now account for 65% of all stocks worldwide

Those are historically high valuations

Yet, even at these lofty market levels, you can still beat the market in the long term if you know where to look

Additionally, The Motley Fool CEO and co-founder, Tom Gardner, believes the key to beating the market now lies in looking "where people aren't looking

On the other hand, " Image source: Getty Images (noteworthy indeed), in light of current trends

The evidence shows type of stocks investors should buy now In a recent interview, Gardner d his perspective on the current state of the market and how investors should apach

Additionally, While recognizing that the are at high valuations, Gardner maintains that there are still hundreds of good stocks you could buy now, but they're bably "not the most well-known, actively ed, most richly valued" stocks, in light of current trends

In contrast, Gardner believes it's time to be "a little more defensive" right now and look for investments "where others aren't looking, in light of current trends. " I'm saying if you're looking for good returns over the next 3-5 years that beat the market, I think you need to look where others aren't looking now, and you need to look for dividend payers, more value-oriented, in light of current trends

At least where we are in valuation now

However, So, where can you look to invest now

Think dividends, defensive, and value stocks, amid market uncertainty

Conversely, While good dividend stocks can generate a steady of passive income even during turbulent times, defensive stocks are typically recession-of stocks and a great way to reduce your portfolio risk

Value stocks, meanwhile, trade for a price lower than what their fundamentals merit

More often than not, some of the most boring es fit two or more of these three stock, and there are plenty of such stocks today that could beat the market in the long term, amid market uncertainty

In today's environment, three stocks come to mind, in today's financial world

Additionally, 9%-yielding safe energy dividend stock Enterprise ducts Partners (EPD -0, in today's financial world. 71%) is one of the largest mid energy companies in the U. , owning over 50,000 miles of pipeline, in today's financial world

Additionally, It stores, cesses, and transports natural gas liquids and other ducts under long-term contracts in return for a fee

This demonstrates that is recession-of and largely immune to the volatility in oil and gas prices

Moreover, 90% of the contracts have escalation clauses to offset the effects of inflation

EPD data by YCharts, in this volatile climate

At the same time, All those factors combined mean that Enterprise ducts can generate steady, predictable cash flows and pay regular, growing dividends (something worth watching), in today's market environment

Additionally, The energy giant has increased its dividend for 26 consecutive years, and the stock yields a hefty 6

With Enterprise ducts bringing $6 billion of the $7. 6 billion in major capital jects online this year, investors can expect to see steady growth in its cash flows and dividends, regardless of where the economy or stock are (something worth watching)

Additionally, A defensive dividend growth bet Brookfield Infrastructure's (BIPC 0, given current economic conditions. 29%) (BIP -1, in light of current trends

On the other hand, 08%) is also recession-resilient, as it earns from defensive assets, such as utilities, rail and toll roads, mid energy, and data centers

Nearly 85% of Brookfield's funds from operations (FFO) are contracted or regulated and indexed to inflation

Nevertheless, While that makes its cash flows predictable, regular acquisitions and recycling of old, mature assets drive cash flows higher

Over the past 15 years, Brookfield has grown its FFO per unit by a compound annual growth rate (CAGR) of 15% and its dividend by a 9% CAGR

Furthermore, With the company targeting over 10% FFO growth and 5% to 9% annual dividend growth in the long term, Brookfield Infrastructure is a great stock to own during uncertain times (something worth watching)

Additionally, The corporate s also yield a good 4%

A beaten-down Dividend King to buy Un Enterprise ducts and Brookfield Infrastructure, which are defensive stocks, Nucor (NUE 3. 16%) is a cyclical stock

Nevertheless, However, you'd be surprised to see the kind of total returns it has generated in recent years. ^SPXTR data by YCharts, given the current landscape

However, Nucor is the largest and most diversified steel ducer in North America

While this exposes the company to commodity prices, Nucor has sailed through turbulent times primarily due to two reasons

First, it uses electric arc furnaces in steel mills

Nevertheless, They're more flexible, efficient, and cost-effective compared to traditional blast furnaces

Second, its mills use scrap as the key raw material, which Nucor duces internally

Vertical integration, a cost-efficient model, and a strong balance sheet contribute to Nucor's as a Dividend King, having increased its dividend for 52 consecutive years

With President Donald Trump imposing hefty tariffs on steel imports, Nucor could be a solid turnaround story

Furthermore, Trading at 30% off all-time highs as of this writing, Nucor is one value plus dividend growth stock you could buy now (which is quite significant).