McDonald’s and Coca-Cola: The Defensive Stocks Offering Stability in Volatile Markets

While global markets remain heavily focused on artificial intelligence and technology stocks, this enthusiasm has shifted attention away from steady performers that continue to offer reliability during uncertain times.

After a strong start to the year, the Nasdaq has turned negative, yet McDonald’s shares have risen 8% and Coca-Cola has gained 14%. Both companies have demonstrated resilience across multiple market cycles, supported by strong brand power and consistent demand.

“In volatile markets, dividend-paying stocks offer something precious: stability,” said Zavier Wong, Market Analyst at eToro. “These are mature, financially sound businesses that continue to reward shareholders even when markets pull back.”

For investors in the UAE, where diversification across global markets is a growing priority, defensive and income-generating stocks deserve renewed attention. While recent investor enthusiasm has largely centred on high-growth sectors such as AI and crypto, reliable dividend payers continue to play an important role in building balanced portfolios.

Both McDonald’s and Coca-Cola report earnings this week, offering valuable insight into the health of the consumer and discretionary spending trends.

For McDonald’s, investor focus will be on its ability to maintain margins while driving customer traffic, particularly as lower-income consumers scale back spending. Value-focused offerings have been key to sustaining demand. The company also maintains a significant presence across the Middle East, operating more than 2,000 locations in the region.

Coca-Cola, which controls around 45% of the global carbonated soft drink market and owns five of the world’s top ten beverage brands, including Sprite and Fanta, is expected to demonstrate continued resilience. Fourth-quarter revenue is forecast to grow by 5%, with margins remaining stable.

Both companies continue to offer defensive qualities in today’s volatile market environment. If earnings results confirm resilient demand, it reinforces the case for holding these stocks as stabilising positions. McDonald’s has increased its dividend for nearly 50 consecutive years, while Coca-Cola has done so for more than 60.

“They may not be the flashiest names in the market,” Wong added, “but in turbulent times, they’re the kind of stocks that help keep portfolios steady. Sometimes, boring is brilliant.”