Many investors, such as Warren Buffett, praise defensive investing. As Buffett’s mentor Benjamin Graham recommended, investing with a margin of safety can be highly valuable in especially inflationary environments. Defensive portfolios of such investors generally contain high dividend yielding stocks since these stocks provide better protection in inflationary environments.
On the other hand, high dividend yields are not the only important criteria to be sought in defensive stocks. Investors also look for consistent dividend growth in each high dividend yielding stock. We think the stocks that have long records of increasing dividend payments are appealing to defensive investors that demand consistency and some inflation protection.
Source: Seeking Alpha
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