It’s getting stormy out there in the markets. The Eurozone crisis is beginning to rear its ugly head once again and with markets at all-time highs, many investors are looking for a reason to sell.Â
So, now could be the perfect time to shift your portfolio on to a more defensive stance.Â
The best way to build a defensive portfolio is look to look for companies with shares that support a high-dividend yield and have a low beta. Simply put, beta is a measure of risk, comparing the share in question to the wider market.
Specifically, a beta of one indicates that the company’s share price will move with the market. A beta of less than one means that the shares will be less volatile than the market, and a beta greater than one indicates that the company’s shares will be more volatile than the market.Â
Low risk 
GlaxoSmithKline (LSE: GSK) has one of the lowest betas and highest dividend yields in the FTSE 100. At present, the company supports a dividend yield of 5% and the shares have a beta of 0.4, implying that for every 1% the market moves, Glaxo’s shares will only move 0.4%.
What’s more, Glaxo’s shares are now trading at one of the lowest valuations in the biotechnology sector. The company trades at a historic P/E of 14 compared to the sector average of 18.
Takeover chatterÂ
Glaxo’s peer, AstraZeneca (LSE: AZN) is another low-risk company, although after Pfizer’s recent offer for the company, Astra’s shares are trading at a high valuation multiple and the dividend yield is nothing to get excited about.Â
At present, Astra offers a dividend yield of 3.8%, attractive in this low interest rate environment but low compared to that of Glaxo and other companies mentioned within this piece. Still, the company’s shares have a beta of 0.2 indicating that for every 1% the market moves, Astra’s shares will only move 0.2%.Â
Slow and steady
Due to its defensive nature, National Grid (LSE: NG) is a stable investment to own. Indeed, with a beta of 0.4 and a dividend yield of 5%, the company’s shares would suit any risk-averse portfolio. Additionally, due to the nature of National Grid’s business, the company’s profits are stable and predictable, which has allowed the company’s management to state that the dividend payout will rise in line with inflation for the foreseeable future.Â
With a hefty dividend yield and low risk, it’s no surprise that investors are willing to pay a premium for National Grid’s shares. The company currently trades at a forward P/E of 15.6, which may put some investors off.Â
The lowest of the low
As a utility company, United Utilities (LSE: UU), by its very nature is defensive, so it comes as no surprise to learn that the company’s shares are some of the most defensive in the FTSE 100. For example, United’s shares have a beta of 0.15, implying that for every 1% the index moves, United’s shares will only move by 0.15%.Â
With this being the case, it is likely that in the event of a market downturn, United’s shares will hardly budge. Couple this with the company’s 4.1% dividend yield and you have a perfect defensive stock.Â
Media giant
The last company on my portfolio protection list is British Sky Broadcasting (LSE: BSY). Known for its free cash flow, BSkyB’s management has made it its mission to put shareholders first. During 2013 the company returned £1.1bn to investors though both share buybacks and dividend payouts — that’s around 8% of the company’s market capitalization.Â
And the company would make a great fit for any defensive portfolio, as at present, BSkyB offers a dividend yield of 3.5% and the shares have a beta of 0.5.