While it’s always a good idea to balance your portfolio with defensive stocks, the present chaos dramatically incentivizes this subsegment. As you’ve no doubt heard, the U.S. and the rest of the world presently reel from two major banks failing. Moreover, the main concern centers on the contagion spreading to other components of the global economy.

What really adds weight to the drama here is of course the Federal Reserve. The central bank must decide how to navigate monetary policy in light of recent developments. If the Fed reacts with a more dovish stance, it would contradict its stated intentions of controlling inflation. However, if it continues with interest rate hikes, this hawkish framework could break more cogs in the flywheel.

No matter what, the Fed faces a gargantuan task with serious consequences either way. Basically, it’s caught between a rock and a hard place. With investors deeply (and understandably) concerned, the most-established businesses probably make the most sense. In that spirit, below are the defensive stocks to buy during this chaotic spell.

Progressive (PGR)

As an insurance stalwart, Progressive (NYSE:PGR) makes for an ideal candidate for defensive stocks to buy. Featuring an established and permanently relevant business, PGR features predictability in the financials and the technicals. Further, the chaos from the coronavirus pandemic – such as heightened traffic incidents and property crime – incentive financial protection programs.

Most importantly, Progressive garners the most attention for its auto insurance. Required by the vast majority of states, drivers practically can’t go anywhere (legally) without coverage. Therefore, Progressive cynically benefits from a captive audience.

To be fair, the company doesn’t deliver the most remarkably positive financials. However, it does enough to get the job done. For example, Progressive’s three-year revenue growth rate pings at 8.3%, above 59.45% of its peers. As well, the company enjoys a long history of consistent annual profitability. Finally, Wall Street analysts peg PGR as a consensus moderate buy. Their average price target comes in at $147, implying nearly 8% upside potential.

SAP (SAP)

A German multinational software company, SAP (NYSE:SAP) develops enterprise software to manage business operations and customer relations. Further, the company is the world’s leading enterprise resource planning software vendor. Given the size and influence of its business, SAP makes for an ideal choice for defensive stocks to buy. Even with various economic challenges, companies must continue to operate. More often than not, the large players use SAP.

While the company features far-from-perfect financials, it offers plenty of substance to chew on. For example, SAP’s Altman Z-Score pings at 4.09, indicating low bankruptcy risk. Operationally, its three-year free cash flow (FCF) growth rate comes in at 21.9%, above 64.74% of the industry. As well, its net margin is 7.4%, ranked better than 70.91% of sector rivals. Also, investors may note that right now, the market prices SAP at a forward multiple of 20.41. As a discount to earnings, SAP ranks better than 60.98% of the field.

Lastly, covering analysts peg SAP as a consensus moderate buy. Their average price target stands at $137, implying 15% upside potential.

Merck (MRK)

A multinational pharmaceutical giant, Merck (NYSE:MRK) makes for an intriguing case for defensive stocks to buy. Basically, no matter what happens with the global markets, people will need access to therapeutics and vaccines. While MRK incurred a volatile ride in the year so far, in the past 365 days, it gained almost 32% of equity value. Better yet, there may still be extra room in the tank.

Overall, Merck enjoys a solid fiscal profile. Notably, its Altman Z-Score comes in at 4.49, which indicates low bankruptcy risk. Operationally, the company posts a three-year revenue growth rate of 15.4%, above nearly 75% of the drug manufacturing industry. Also, its book growth rate during the same period is 21.1%, well above average. On the bottom line, Merck’s net margin pings at 24.49%. This stat helps undergird the company’s forward yield of 2.8%, noticeably above the healthcare sector’s average yield of 1.58%.

In closing, analysts peg MRK as a consensus moderate buy. Further, their average price target stands at $119.95, implying over 15% upside potential.

Air Products and Chemicals (APD)

An industrial player, Air Products and Chemicals (NYSE:APD) specializes in selling gases and chemicals for industrial uses. Fundamentally, APD makes for a solid case for defensive stocks to buy because of its “backstage” utility. While Air Products may not be a Broadway star so to speak, its services undergird various applications. Without the company, infrastructural networks could fail.

In fairness, APD went volatile this year, shedding over 10% since the January opener. However, in the trailing one-year period, APD gained almost 19% of its equity value. On the financial front, Air Products delivers the goods. Its three-year revenue growth rate pings at 12.3%, ranking better than 67.43% of the competition. Also, it’s a stable business, as its Altman Z-Score of 4.44 indicates. On the bottom line, Air Products features a net margin of 17.61%, above 86.52% of sector players. Also, these robust earnings support the company’s forward yield of 2.55%.

Turning to Wall Street, analysts peg APD as a consensus moderate buy. Moreover, their average price target stands at $324.67, implying over 18% upside potential.

Wendy’s (WEN)

A popular fast-food chain, Wendy’s (NASDAQ:WEN) makes a compelling case as one of the defensive stocks to buy. Though it’s tied to the consumer discretionary sector, Wendy’s benefits from the trade-down effect. Essentially, as economic conditions worsen, consumers will eschew fine-dining establishments for cheaper fare like Wendy’s. That’s one positive catalyst.

The other tailwind centers on social normalization. As white-collar employees return to the office, Wendy’s coffee and breakfast menu could be appealing to worker bees. In addition, Wendy’s offerings would compete effectively on price with premium-label coffee shops.

Generally speaking, WEN represents one of the defensive stocks to buy that features just enough positives. For instance, the underlying company’s three-year revenue growth rate stands at 10.1%, above 84.45% of the competition. On the bottom line, its net margin comes in at 8.46%, boxing out 83.33% of sector players. Plus, Gurufocus’ proprietary calculations for fair market value (FMV) indicate WEN is undervalued. Looking to the Street, covering analysts peg WEN as a consensus hold. However, their average price target stands at $24.78, implying over 20% upside potential.

TJX Companies (TJX)

For those that don’t mind adding a little risk to their defensive stocks to buy in exchange for greater reward potential, TJX Companies (NYSE:TJX) brings plenty to think about. A multinational off-price department store, TJX largely offers a relevant business profile. However, the disruption of the Covid-19 pandemic clouded the narrative. With workers operating remotely, a wardrobe upgrade wasn’t really necessary.

However, TJX may enjoy two powerful upside catalysts. First, as stated above, the normalization of society should incentive an apparel upgrade. Second, should the economy weaken, off-price department stores will look much more attractive. Demand may rise, making TJX one of the top defensive stocks to buy.

Also, the company features several compelling fiscal attributes. Its three-year revenue growth rate stands at 7.6%, above 64.25% of the (cyclical) retail industry. On the bottom line, its net margin pings at 7%, above 75.61% of sector players. Likely to catch people off guard, analysts peg TJX as a unanimous strong buy. What’s more, their average price target stands at $90.73, implying nearly 22% upside potential.

Exxon Mobil (XOM)

Despite the political and ideological winds favoring renewable energy infrastructures, hydrocarbon specialists will likely remain relevant for years. That’s good news then for Exxon Mobil (NYSE:XOM), one of the top defensive stocks to buy. While energy prices may suffer from rising interest rates, it’s also possible they could rise on geopolitical catalysts.

Obviously, the big one centers on China. With its economic reopening, a gradual increase in commercial activity should accelerate resource consumption. Cynically, that’s a tailwind for XOM stock. Also, the aforementioned social normalization trend should see traffic volume on U.S. roadways rise. If so, this framework may spark inflation in the energy arena.

After struggling during the early phase of the Covid-19 disaster, Exxon Mobil looks quite attractive financially. For example, its three-year revenue growth rate of 15.9% ranks above 70.88% of the oil and gas industry. Further, its net margin of nearly 14% beats out almost 66% of its rivals. Finally, Wall Street analysts peg XOM as a consensus moderate buy. Their average price target stands at $128.17, implying over 28% upside potential.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.