In this article, we will look at the 13 Best Defensive Stocks to Invest in According to Analysts.
With the stock market near all-time highs and many headlines suggesting limited room for further growth, some investors are beginning to wonder if it’s time to be more cautious. So, when the markets are going through a mix of uncertainty and optimism, how should the investors position their portfolios? One prudent approach is to consider defensive stocks, i.e., companies that tend to perform well regardless of the broader economic conditions.
In an early-May report, Jeremiah Buckley, a Portfolio Manager at the asset management company Janus Henderson Investors, noted that year‑to‑date (YTD), defensive sectors have notably outpaced cyclicals, with defensives up 5.2% versus cyclical stocks down 7.9%. This divergence reflects growing investor caution amid persistent inflation concerns and tariff-related volatility. While Buckley makes a case for cyclicals over the longer-term period due to their relatively stronger earnings projections, defensives remain in a better position in the face of prevailing volatility.
READ ALSO: 10 Most Oversold S&P 500 Stocks So Far in 2025 and 10 Most Oversold Semiconductor Stocks So Far in 2025.
That said, market sentiment and forecasts remain mixed. On August 6, Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, expressed caution with optimism in her outlook in her CNBC interview. Although her year-end price target for equities is close to current levels, she sees meaningful upside risks, particularly if market sentiment improves and investor positioning shifts further towards equities. She believes that better economic conditions may be around the corner, driven by deferred investment in infrastructure and capital projects.
With the markets riding high and the outlook still unclear, defensive stocks can be a prudent place to park money for investors. They offer stability, reliable income, and good value, even when the economy sends mixed signals. In other words, defensive stocks aren’t just useful during downturns, they can also help keep investors’ portfolios steady when the market feels shaky.
With these insights in mind, let’s explore the 13 best defensive stocks to invest in according to analysts for your portfolio.
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Our Methodology
To determine the best defensive stocks to invest in according to analysts, we began by filtering U.S.-listed companies with a market capitalization exceeding $2 billion across four key defensive sectors: consumer staples, healthcare, utilities, and telecom. Next, we applied three main selection criteria: a beta of less than 1, positive EPS growth over the past three years and the upcoming financial year, and a dividend yield of at least 1%. From the resulting list, we identified the top 10 stocks with at least 14%-15% price target upside and ranked them in ascending order of the respective potential upside. We have also added the number of hedge fund holders for each stock, based on the hedge fund sentiment data as of Q1 2025 from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Note: All pricing data is as of market close on August 1, 2025.
13 Best Defensive Stocks to Invest in According to Analysts
13. Zimmer Biomet Holdings Inc. (NYSE:ZBH)
Beta: 0.68
Dividend Yield: 1.1%
Potential Upside: 15%
Number of Hedge Fund Holders: 52
Zimmer Biomet Holdings Inc. (NYSE:ZBH) is one of the best defensive stocks to invest in according to analysts. With a decline of around 14%, Zimmer’s YTD share price performance has been weak. Its management is focussing on reinvigorating growth, and in a bid to expand its robotics platform and its portfolio of navigation and enabling technologies, the company had announced the acquisition of Monogram Technologies Inc. (NASDAQ:MGRM) on July 14 for an enterprise value of $168 million.
Monogram is an orthopaedic robotics company, and Ivan Tornos, Chairman and CEO of Zimmer Biomet, expects the deal to boost his company’s offerings with semi- and fully autonomous robotic technologies. On the prospects of the integration, he stated:
“Monogram’s technology is a major leap forward, demonstrating our commitment to becoming the boldest and broadest innovator in surgical robotics and navigation. With Monogram’s proprietary technology, Zimmer Biomet has the potential to become the first company to deliver fully autonomous capabilities and redefine both the standard of care and the future of orthopaedic surgery.”
Analyst opinions over the deal have been mixed. While analysts from RBC Capital and BTIG reaffirmed their positive view, the agreement has not changed the opinion of BofA analyst Travis Steed, who reiterated a Hold rating and a $110 price target following the deal announcement. He noted that while the acquisition strengthens ZBH’s position in the semi-autonomous robotics market, the financial benefits will be modest in the near term.
As per the company management, the transaction will be funded through cash and available debt and is expected to be EPS neutral through 2027 and accretive thereafter. However, Steed believes the company’s already strong margins limit further EPS upside, and while the move broadens ZBH’s competitive edge, material revenue contributions are not expected until 2027.
Zimmer Biomet Holdings Inc. (NYSE:ZBH) is a global medical technology company that designs, develops, manufactures, and markets orthopaedic products, including implants, digital and robotic solutions.
12. The Coca-Cola Company (NYSE:KO)
Beta: 0.44
Dividend Yield: 3.0%
Potential Upside: 16%
Number of Hedge Fund Holders: 87
The Coca-Cola Company (NYSE:KO) is one of the best defensive stocks to invest in according to analysts. Coca-Cola has so far seen a robust performance, with YTD share price gains of around 11%, outperforming the broader S&P 500 Index by nearly 5%. With that, the stock is also among the only two stocks in this list that have posted positive share price performance (as of August 1), the second one being STERIS plc, covered at number 5.
As the macroeconomic environment remains uncertain, quarterly results across corporations were under increased scrutiny, and Coca-Cola’s results were no exception. The company reported its Q2 2025 results on July 22, which were overall steady. While the company maintained its organic revenue growth guidance of 5% to 6% for the full year, it narrowed its adjusted EPS outlook to around 3% tightening it from the earlier 2% to 3% range.
Following the Q2 earnings report, an analyst from BofA maintained his Buy rating and raised the price target slightly from $77 to $78 on July 23. The update reflects better-than-expected Q2 2025 earnings per share, which surpassed the analyst’s expectations.
However, the analyst noted that despite the earnings beat, the stock underperformed on the day of the release, which he attributed mainly to the weaker-than-expected unit case volumes and broader market pressure. The analyst acknowledged these short-term challenges but pointed out that the volume comparisons will ease in the third quarter, which could help improve performance sequentially. Coca-Cola continues to show solid fundamentals, backed by over five decades of uninterrupted dividend growth and a well-established global brand.
The Coca-Cola Company (NYSE:KO) is one of the world’s largest beverage companies. Best known for its soft-drink, Coca-Cola, the company manufactures, markets, and distributes a wide range of beverages, including carbonated soft drinks, non-alcoholic beverage concentrates and syrups, as well as alcoholic beverages.