Amid recent market volatility, driven by inflation concerns and a tech stock sell-off, some defensive stocks may provide safe investment options. The Nasdaq Composite is down nearly 1%, with the S&P 500 and Dow Jones Industrial Average also declining. Wolfe Research identified potential defensive stocks based on high dividend yields, low payout ratios, and limited leverage. Ford Motor emerged with a 6% dividend yield, a 35% payout ratio, and low leverage, though analysts remain cautious, with 15 of 26 holding a ‘hold’ rating. Ford’s shares dropped over 13% in 2024 but gained 2% after reporting strong annual vehicle sales. On the other hand, Medtronic, with a 4% dividend yield and a 48% payout ratio, has mixed analyst ratings, but its stock rose over 3% following positive news while outperforming the S&P 500 with a 7% increase in six months. Coca-Cola also had a robust year, up nearly 9% in 2024, boosted by an upgrade from TD Cowen, garnering strong analyst support. Its average price target suggests a potential 19% upside. With many analysts favoring stocks like Ford, Medtronic, and Coca-Cola, defensive plays could offer middle ground in a fluctuating market.
