3 Defensive Stocks to Buy in September

Susan Dziubinski: Hi, I’m Susan Dziubinski, co-host of The Morning Filter podcast. On a recent episode, Morningstar Chief US Market Strategist Dave Sekera pointed out that historically, September is the worst month for stocks. While he didn’t predict a stock market downturn, he did recommend three attractive stocks to buy from defensive sectors, just in case. His picks were Mondelez International MDLZ, Alliant Energy LNT, and Baxter International BAX.

Today, we’re sharing three more defensive stocks to consider. These undervalued moaty stocks may be more resilient if the market takes a turn for the worse.

3 Defensive Stocks to Buy in September

1. UnitedHealth Group UNH
2. Portland General Electric POR
3. Lamb Weston LW

Our first undervalued defensive stock to buy this month is UnitedHealth Group. This narrow-moat company from the traditionally defensive

sector operates a top-tier health insurer, pharmacy benefit manager, provider, and health analytics franchise. UnitedHealth has faced its share of challenges and headwinds during the past few years, and regulatory challenges around its Medicare Advantage and pharmacy benefit management operations remain a concern. Yet the company put up strong second-quarter results and lifted its outlook for 2026. Morningstar recently raised its fair value estimate on the stock by 11% to $475 per share. The stock looks undervalued.

Read Morningstar’s full report on UnitedHealth Group.

Our second undervalued stock to buy to play a little defense is from the

sector. It’s Portland General Electric. This narrow-moat utility recently reached a settlement with Oregon regulators, allowing it to create a holding company structure like most US utilities. Portland General could then finance investments outside its regulated utility, potentially allowing it to make acquisitions and growth investments that would boost shareholder returns. We continue to forecast 7% annual earnings growth through 2029. The stock offers a nice yield above 4%, to boot. We think Portland General is worth $56 per share, and it trades well below that.

Read Morningstar’s full report on Portland General Electric.

Our final defensive stock to buy is Lamb Weston. This

company is North America’s largest producer of branded and private-label frozen potato products. The firm primarily sells french fries to restaurants. Despite the current supply/demand imbalance, we view frozen processed potatoes as positioned for cyclical recovery. In fact, we’re already seeing early signs of recovery in the company’s North American segment. With management saying during its recent earnings call that capacity rationalization is happening industrywide, we think Lamb Weston is at the beginning of an improved competitive environment. We assign Lamb Weston stock a $65 fair value estimate.

Read Morningstar’s full report on Lamb Weston.

For more stock ideas, be sure to tune in to The Morning Filter each week wherever you get your podcasts and visit morningstar.com, too.

Morningstar senior analysts Kris Inton, Travis Miller, and Julie Utterback provided the research behind this segment.

Watch 2 Deeply Undervalued Stocks to Rent Now, Not Own Forever for more from Susan Dziubinski.