Six Low-Beta Defensive Stocks That Held Ground When the S&P 500 Lost 16%

When the S&P 500 shed more than 16% in 2022 under the weight of Federal Reserve rate hikes and inflation, five of six large-cap defensive names screened by Benzinga stayed in positive territory. The group — Procter & Gamble (NYSE: PG), Merck & Co. (NYSE: MRK), Bristol-Myers Squibb (NYSE: BMY), General Mills (NYSE: GIS), McDonald's (NYSE: MCD), and American Tower Corp. (NYSE: AMT) — share a common thread: betas of 0.50 or below relative to the SPDR S&P 500 ETF (NYSEARCA: SPY), meaning each moves at roughly half the market's amplitude or less.

The Physical Businesses Behind the Low Betas

These are not abstract financial instruments; each stock sits downstream of essential, recurring demand. Procter & Gamble, with a market cap of approximately $330 billion, routes consumer staples through mass merchandisers, grocery chains, drug stores, and e-commerce globally across five segments including beauty, healthcare, and fabric care. General Mills, incorporated in 1928 as a flour miller, now distributes Cheerios, Cinnamon Toast Crunch, Nature Valley, and Yoplait through grocery, convenience, and discount channels. McDonald's, founded in 1940 and headquartered in Chicago, operates and franchises restaurants worldwide selling everything from breakfast burritos to soft serve — a franchise model that keeps revenue flowing whether the broader economy is expanding or contracting.

On the healthcare side, Merck (market cap $310.14 billion) covers oncology, cardiovascular, diabetes, and animal health, including veterinary vaccines. Bristol-Myers Squibb ($113.42 billion market cap) sells cancer treatments targeting lymphoma, myeloma, and leukemia directly to wholesalers, hospitals, pharmacies, and government agencies — a buyer base that does not disappear in recessions. American Tower, the lone underperformer in 2022, owns roughly 219,000 cellular communications sites and collects lease income from tenants including AT&T (NYSE: T) and T-Mobile US (NASDAQ: TMUS).

What the Numbers Show

General Mills offers the clearest long-run data point: a five-year monthly beta of 0.32 — one-third as volatile as the broader market — while compounding at a CAGR of 9.81% since 1993 against the SPY's 9.72%, dividends reinvested. Current dividend yields across the group range from McDonald's 7.44% down to General Mills' 2.44%, with American Tower at 6.98%, Procter & Gamble at 4.26%, Merck at 3.40%, and Bristol-Myers Squibb at 2.52%.

The Trade-Off Worth Naming

Low beta is not low risk in an absolute sense. These stocks fell during the 2020 COVID-19 crash — less than the index, but they fell. Defensive sectors also tend to lag during low-rate bull markets when cyclicals run. American Tower's performance in 2022 illustrates the point: even a REIT backed by long-term wireless lease contracts is not immune when rate hikes reprice income assets. The screen's real value is diversification math — pairing assets that do not move in lockstep with SPY can improve a portfolio's Sharpe ratio without requiring investors to sacrifice positive expected returns entirely.