Microsoft Plus 2 Elite Defensive Stocks

With the US 10 year Treasury yield near a 24 year high and big bond investors talking about a possible move to 6%, plenty of people are suddenly rethinking risk. Expensive borrowing can punish weaker balance sheets, yet financially solid businesses often hold up better when money is no longer cheap. This article walks through three low risk leaders that offer a sturdier foundation for long term portfolios.

The three stocks highlighted next are a small sample. The full Low Risk Leaders screen surfaced 28 more businesses with equally compelling balance sheets and risk profiles that are not covered here.

To identify and analyze those additional candidates with the strongest foundations, head straight to the Low Risk Leaders screener

Overview: Microsoft is a global software and cloud provider. Its Azure and Copilot-powered services anchor recurring, enterprise-grade digital infrastructure for businesses.

Operations: Microsoft generates about US$138b from Intelligent Cloud, US$140b from Productivity and Business Processes, and US$54b from More Personal Computing, across roughly US$171b in US revenue and US$161b from other countries.

For a Low Risk Leaders portfolio, Microsoft matters because its Azure and Azure AI services sit on top of a sizeable balance sheet and long-term enterprise contracts. This combination can offer portfolio builders a resilient income engine when risk appetite cools.

"Microsoft spent $37.5 billion a quarter because customer demand for Azure cloud computing is growing at 39% per year and the company literally cannot build servers fast enough."

What happens to that low risk profile if one quiet pressure on future cash generation and margins starts to bite harder than expected?

If that pressure on future cash flows is what worries you, read the full narrative for Microsoft to see how Microsoft's risk profile could be quietly shifting.

Overview: Costco Wholesale runs membership-based warehouse clubs worldwide, selling bulk groceries, household goods, fuel, and services to fee-paying members.

Operations: Costco generates about US$303.2b in revenue from membership warehouses, with roughly US$219.8b in the United States and US$83.3b across Canada and other international markets.

Costco Wholesale matters for a Low Risk Leaders screen because its subscription-style membership income and disciplined warehouse format create a steady cash engine that can support a robust balance sheet even when consumer confidence wobbles.