10 Best Defensive Stocks To Buy Now

5. The AES Corporation (NYSE:AES)

Stock Price as of August 16: $17.27

Average Analyst Price Target Upside as of August 16: 33.14%

The AES Corporation (NYSE:AES) is a Texas-based power company with a presence in 14 countries. The company has evolved from a consulting firm to a major player in electricity generation and distribution. It owns and operates power plants and utilities, which generate electricity from various sources, including coal, gas, hydro, wind, solar, and other renewables. The company serves 2.6 million customers and has a generation portfolio of nearly 35,000 megawatts.

AES Corporation (NYSE:AES) is one of the major clean energy companies that should benefit from the rise of data centers. In Q2, the company demonstrated strong performance and strategic growth. The company signed new agreements totaling 2.5 GW, with 2.2 GW allocated to data center customers and additional agreements expected to support up to 3 GW in new data center load.

The company also finalized significant long-term Power Purchase Agreements (PPAs) for 727 MW of wind and solar energy in Texas and a 310 MW retail supply agreement for Ohio. With a total PPA backlog of 12.6 GW, including 1 GW of new renewables and 976 MW of recently completed projects, the company is on track to add 3.6 GW to its operational portfolio by year-end 2024.

Analysts remain quite bullish on power generation companies including AES Corporation (NYSE:AES) as it has been covered by 13 analysts. The average price target of $23.00 represents an upside of over 33.14% from current levels, as of August 16. It ranks fifth on our list of the best defensive stocks to buy now.

On July 22, Barclays slightly reduced its price target for the stock from $23 to $22 while maintaining an Overweight rating. This adjustment was part of its overall outlook for the utilities sector for the second quarter. Despite the lower price target, Barclays remains optimistic, especially about the growth potential in smaller, emerging data center markets, which could positively impact companies like AES Corporation (NYSE:AES) in the long term.