Rotating into defensive stocks? 3 ASX companies to consider

With markets facing strong volatility over the last couple of weeks, investors might now be shifting focus to defensive shares. 

Defensive stocks are typically shares in established, dividend-paying companies that generate relatively stable profits regardless of broader economic conditions. 

They are commonly found in sectors such as consumer staples, healthcare, utilities, and parts of the food and beverage industry. 

The argument for these companies is simple. 

Everyday consumers still need these essential goods and services regardless of broader economic factors. 

As a result, demand for their offerings tends to remain relatively steady during downturns.

If you are focussed on gaining exposure to these kinds of companies, here are three to consider. 

Woolworths Group Ltd (ASX: WOW)

As of 2025, Woolworths was the leading supermarket choice for 34% of Australians. 

This market share puts the company in a strong position amidst broader economic headwinds. 

Woolworths shares are often referred to as defensive shares, as the share price can act as a potential buffer against economic downturn given the nature of its primary business activities. 

Even in an economic downturn, there is still demand for food, toiletries, and other essentials.

Furthermore, the company has just come off a robust earnings season, posting strong results leading to increased investor confidence. 

The share price is subsequently up nearly 19% thanks to these results. 

It also recently increased its dividend.

Transurban Group (ASX: TCL)

Transurban is one of the world’s largest toll-road operators, managing and developing urban toll-road networks in Australia and North America.

These toll roads are a key part of daily transport networks in cities such as Sydney, Melbourne, and Brisbane, as well as parts of North America. 

Because commuters, freight vehicles, and businesses rely on these roads for everyday travel and logistics, traffic volumes tend to remain relatively stable even during periods of economic weakness.

Another reason Transurban is seen as defensive is its predictable and long-term revenue structure.

The company typically holds long-duration concessions to operate toll roads, often lasting several decades. These agreements provide visibility over future earnings, and many include mechanisms that allow toll prices to increase annually, sometimes linked to inflation.

It also posted strong results in February, reinforcing its market strength and reliable earnings. 

This ASX defensive stock is up a healthy 9% over the last 12 months. 

Cobram Estate Olives Ltd (ASX: CBO)

Another consumer staples stock worth considering is Cobram Estate. 

It is a producer and marketer of premium quality extra virgin olive oil. It owns two Australian brands, Cobram Estate and Red Island, which account for about half of the olive oil market share in Australian supermarkets by value.

While it’s less of an essential item compared to the previous two defensive stocks above, it has a positive outlook from analysts. 

Additionally, it operates with a vertically integrated business model. Cobram Estate manages much of the production process itself—from growing olives in large-scale groves to processing and packaging olive oil.

This can help manage costs more effectively than companies relying on third-party growers or external suppliers for raw materials and production

After surging 100% higher in 2025, it has since lost ground. 

Analysts are projecting a 9% increase over the next 12 months. 

The post Rotating into defensive stocks? 3 ASX companies to consider appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.