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.
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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.
11. The Procter & Gamble Company (NYSE:PG)
Beta: 0.38
Dividend Yield: 2.8%
Potential Upside: 17%
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is one of the best defensive stocks to invest in according to analysts. The company reported its Q4 2025 (FY ends in June) on July 29 with $84.3 billion in revenue and $6.83 in EPS. In fiscal 2025, the company delivered more than $16 billion in shareholder returns, including $9.9 billion in dividends and $6.5 billion through share buybacks.
Following the results, TD Cowen analyst Robert Moskow reiterated his Buy rating on Procter & Gamble, maintaining a $168 price target. His view remains constructive, even as the company wrapped up the fiscal year on a softer note and issued a wide earnings guidance range for FY26.
Moskow believes that there is uncertainty in the near term due to macroeconomic challenges such as geopolitical risks and shifting tariff policies that could weigh on performance. However, he sees these factors as manageable as he remains confident over P&G’s strategic direction.
A key part of the bullish thesis lies in P&G’s commitment to product innovation. Moskow expects this focus will help the company gain ground against peers, particularly as it looks to reclaim market share in core U.S. categories like Skin Care and diapers. While pricing dynamics may fluctuate, especially if tariffs begin to impact cost structures, he believes P&G will continue to adjust pricing to preserve margins.
The company has already announced a CEO transition (COO Shailesh Jejurikar to become CEO effective January 1, 2026), which is also seen as an opportunity for renewed strategic clarity. Moskow anticipates that under new leadership, P&G will sharpen its execution and prioritize initiatives that support longer-term growth.
The Procter & Gamble Company (NYSE:PG) is a consumer goods company that creates, manufactures, markets, and distributes a diversified portfolio of daily-use products such as fabric & home care, beauty, grooming, baby, feminine & family care.
10. Comcast Corp. (NASDAQ:CMCSA)
Beta: 0.92
Dividend Yield: 3.9%
Potential Upside: 17%
Number of Hedge Fund Holders: 81
Comcast Corp. (NASDAQ:CMCSA) is one of the best defensive stocks to invest in according to analysts. On August 1, TD Cowen analyst Gregory Williams reiterated his Buy rating on Comcast and raised the price target to $46 from $45, following the company’s better-than-expected second-quarter results.
Williams pointed to solid, better-than-expected performance across key metrics, including EBITDA, free cash flow, and mobile subscriber growth. He noted that Comcast’s broadband business is starting to show signs of stability, with improving trends in subscriber connections and churn, even as competition remains intense.
Comcast’s growth is being driven by several business lines. Its broadband and mobile segments continue to perform well, and its streaming operations are making meaningful contributions. The analyst believes that these areas give the company multiple paths to sustain revenue growth over the coming years.
The analyst also highlighted Comcast’s strong financial footing. Among the most notable financial healthy metrics highlighted were the company’s healthy balance sheet, ongoing share repurchases, consistent dividend payouts, and expected tax-related benefits.
Although it’s still early to gauge the full impact of Comcast’s recent strategic initiatives, Williams sees the initial results as encouraging. In addition, the combination of operational momentum and sound financial management supports his positive outlook on the stock.
Comcast Corp. (NASDAQ:CMCSA) is a global media and technology company that delivers broadband, wireless, video, and voice services, distributes and streams entertainment, sports, and news, and operates Universal theme parks.
9. McCormick & Company Inc. (NYSE:MKC)
Beta: 0.66
Dividend Yield: 2.6%
Potential Upside: 18%
Number of Hedge Fund Holders: 42
McCormick & Company Inc. (NYSE:MKC) is one of the best defensive stocks to invest in according to analysts. In its Q2 2025 results report at the end of June, the company highlighted headwinds from tariff costs over FY 2025, which it plans to offset through adjustments in sourcing of materials, pricing, and cost discipline.
However, pricing seems to be slightly less elastic for the company, and most of the revenue growth appears to be coming from higher volumes, as pricing has declined for the last three quarters, while it contributed only 0.3% towards the organic sales growth of 1.6% in Q2.
McCormick’s share price has already lost around 8% YTD, and the market appears cautious on the consumption trends. In a note dated July 29, Stifel Nicolaus analyst Matthew Smith revised his outlook on the company and lowered the price target from $82 to $76 while maintaining a Hold rating. Smith expressed a cautious stance ahead of the second-quarter earnings season, particularly for food sector stocks under his coverage.
The analyst pointed to ongoing softness in consumer demand that persisted through the second quarter, contributing to a more conservative view on the group’s performance. For 2025, Stifel projects only about 1% organic sales growth across its food and beverage coverage universe, alongside an average EPS decline of 15%. Given these subdued expectations, the analyst advised investors to take a selective approach when considering exposure to the food sector.
McCormick & Company Inc. (NYSE:MKC) manufactures and markets spices, seasoning mixes, condiments, flavour solutions, and other products to the food industry.
8. Colgate-Palmolive Company (NYSE:CL)
Beta: 0.35
Dividend Yield: 2.5%
Potential Upside: 19%
Number of Hedge Fund Holders: 65
Colgate-Palmolive Company (NYSE:CL) is one of the best defensive stocks to invest in according to analysts. On August 4, Bank of America Securities analyst Peter Galbo reiterated a Buy rating on Colgate-Palmolive, while lowering the price target from $105 to $98. His revised target follows the company’s Q2 results, which broadly met expectations and reflected signs of operational strength.
Organic sales came in line with expectations as they rose by 1.8% in the quarter, while gross margins improved and advertising costs declined, resulting in stronger-than-expected earnings. Adjusted EPS came in ahead of both Bank of America and street estimates, indicating improved cost control and execution.
Galbo also pointed to Colgate’s new three-year productivity initiative as a positive development. The program aims to streamline the supply chain and support long-term strategic priorities. While full-year EPS guidance remains unchanged, the company now expects low single-digit net sales growth and sees reduced currency-related pressure compared to earlier forecasts.
Colgate-Palmolive Company (NYSE:CL) sells household and personal products and boasts many well-known brands in oral care, personal care, home care, and pet nutrition.
7. NextEra Energy Inc. (NYSE:NEE)
Beta: 0.63
Dividend Yield: 3.2%
Potential Upside: 19%
Number of Hedge Fund Holders: 75
NextEra Energy Inc. (NYSE:NEE) is one of the best defensive stocks to invest in according to analysts. On July 23, Goldman Sachs analyst Carly Davenport reiterated a Buy rating on NextEra Energy and kept the price target unchanged at $91. Despite a recent pullback in the stock following Q2 results, Davenport remains confident in the company’s long-term outlook through 2029.
Investor concerns were primarily related to limited visibility beyond 2027 on development plans and earnings growth. However, Davenport pointed to potential upside from upcoming regulatory decisions, particularly the Florida Power & Light rate case, which could serve as a positive near-term catalyst.
The analyst also discussed the implications of the “One Big Beautiful Bill Act.” While the planned phase-out of solar and wind tax credits by 2027 introduces some uncertainty, Davenport believes NextEra is well-positioned to benefit due to its large project pipeline and strong execution capabilities. This gives the company a competitive edge, which, along with a healthy balance sheet and continued access to tax equity markets (i.e., investors provide capital in exchange for tax benefits), supports the analyst’s constructive stance on the stock.
NextEra Energy Inc. (NYSE:NEE) is one of the largest electric power and energy infrastructure companies in North America, having a diverse portfolio of assets, primarily including natural gas, wind, solar, and nuclear generation facilities and battery storage facilities.
6. AptarGroup Inc. (NYSE:ATR)
Beta: 0.57
Dividend Yield: 1.3%
Potential Upside: 22%
Number of Hedge Fund Holders: 28
AptarGroup Inc. (NYSE:ATR) is one of the best defensive stocks to invest in according to analysts. On August 4, William Blair analyst Matt Larew reiterated a Buy rating on AptarGroup (without mentioning a price target), pointing to a combination of solid execution and long-term potential for the company. The analyst’s positive stance comes after the company reported stronger-than-expected results for the second quarter of 2025, with revenue and core growth beating expectations across all segments.
Larew noted that AptarGroup’s third-quarter EPS guidance came in slightly below expectations, but the company’s overall financial performance remains healthy, backed by solid gross margins and strong adjusted EBITDA. He sees higher legal expenses and a pullback in Naloxone sales as short-term challenges, but believes that they are not expected to impact the long-term trajectory.
Another factor that the analyst highlighted was that AptarGroup shares are trading below their historical valuation range and at a discount to peer companies in the pharma packaging space. In his view, this offers an attractive opportunity, especially as earnings are expected to rebound. He expects a return to roughly 10% earnings growth by 2026, which adds to the case for longer-term upside.
AptarGroup Inc. (NYSE:ATR) designs and manufactures drug and consumer product dosing, dispensing, and protection technologies, serving end markets including pharmaceutical, beauty, food, beverage, personal care, and home care.
5. STERIS plc (NYSE:STE)
Beta: 0.92
Dividend Yield: 1.0%
Potential Upside: 23%
Number of Hedge Fund Holders: 46
STERIS plc (NYSE:STE) is one of the best defensive stocks to invest in according to analysts. As of August 1, the stock stands out as only the second name on this list with a positive year-to-date performance (+10.4%).
The company generates more than $750 million in free cash flow annually, with guidance pointing to $770 million for FY 2026. This strong cash generation supports consistent shareholder returns through dividends and buybacks. Most recently, STERIS raised its quarterly dividend by 10% to $0.63 per share, pushing its dividend yield to approximately 1%.
In the long run, STERIS is targeting mid-to-high single-digit revenue growth and guides to delivering double-digit gains in adjusted earnings per share. This combination underpins the positive view around the stock.
Analyst confidence in the name was further reflected on July 22, when KeyBanc analyst Brett Fishbin raised his price target on STERIS to $288 from $277 while reiterating an Overweight rating. According to KeyBanc, recent MedTech trends have been encouraging, especially in the hospital category, where procedure volumes grew at a high-single-digit rate through Q2. While tariff-related uncertainty remains a concern, KeyBanc believes these risks are now well understood and priced into consensus expectations.
STERIS plc (NYSE:STE) provides innovative healthcare and life science products and services worldwide. Its offerings include consumable products, such as detergents and endoscopy accessories; services, including equipment installation and maintenance; and capital equipment, such as sterilizers and surgical tables.
4. Edison International (NYSE:EIX)
Beta: 0.75
Dividend Yield: 6.2%
Potential Upside: 25%
Number of Hedge Fund Holders: 44
Edison International (NYSE:EIX) is one of the best defensive stocks to invest in according to analysts. Edison remains on analysts’ radar as a solid long-term utility play, although it ranks as the second-weakest performer in terms of year-to-date share price decline on this list.
The company recently reaffirmed its confidence in meeting its 2025 earnings target, despite reporting lower core EPS in the second quarter of 2025. Management continues to guide for core EPS in the $5.94–$6.34 range for the year, compared to a consensus of $6.06, and reiterated its long-term earnings growth target of 5% to 7% through 2028, projecting EPS to reach $6.74–$7.14 by then.
The company seems to be witnessing near-term pressures on earnings from higher operating and maintenance costs and elevated interest expenses. These factors contributed to a year-over-year decline in core EPS for Q2 2025 from $1.23 to $0.97.
However, Edison’s revenue was better than expected, rising about 5% year-over-year to $4.54 billion. Despite a higher rate environment, this topline resilience and the steady outlook support the company’s long-term growth outlook.
Following the company’s Q2 results, Barclays analyst Nicholas Campanella raised the firm’s price target on Edison International to $65 from $64 while maintaining an Overweight rating.
Edison International (NYSE:EIX), through its subsidiaries, generates and distributes electric power, as well as provides energy services and technologies, including renewable energy.
3. UnitedHealth Group Inc. (NYSE:UNH)
Beta: 0.43
Dividend Yield: 3.7%
Potential Upside: 33%
Number of Hedge Fund Holders: 139
UnitedHealth Group Inc. (NYSE:UNH) is one of the best defensive stocks to invest in according to analysts. At the time of writing this article, UnitedHealth ranks among the 10 biggest year-to-date decliners, which have lost over 50% among U.S.-listed stocks with a market capitalization exceeding $2 billion.
The company, which was marred by government investigations, operational failures, and leadership changes, reported mixed Q2 2025 earnings results at the end of July. Those results have been unable to shore up the share price, as the long-term growth outlook is still murky.
The company guided for 2025 adjusted EPS to be over $16, which was significantly below Bloomberg’s consensus expectations of $20.4. Seeing the brighter side, Jeff Jonas, portfolio manager at Gabelli Funds, called the guidance highly conservative and believes that it will be easier for the company to beat such low expectations.
However, the steep correction and valuation discount have attracted analysts’ interest, with around two-thirds of them having a Buy or equivalent rating. One of the analysts who maintains an optimistic view is Wells Fargo’s Stephen Baxter. On August 4, Baxter maintained an Overweight rating on UnitedHealth but lowered his price target to $267 from $306. The revision followed a recently held management meeting where he assessed the company’s updated outlook.
According to the analyst, UnitedHealth’s management remains confident in the company’s ability to meet its reset 2025 guidance. In his view, management is taking a cautious but disciplined approach in factoring in cost trends and margin recovery. Baxter views this conservatism positively, suggesting it reduces the risk of further downside revisions.
UnitedHealth Group Inc. (NYSE:UNH) is a healthcare company that provides health insurance and healthcare solutions in the U.S. and globally under the UnitedHealthcare and Optum brands.
2. Zoetis Inc. (NYSE:ZTS)
Beta: 0.88
Dividend Yield: 1.4%
Potential Upside: 36%
Number of Hedge Fund Holders: 74
Zoetis Inc. (NYSE:ZTS) is one of the best defensive stocks to invest in according to analysts. On July 10, Bank of America analyst Michael Ryskin reaffirmed a Buy rating on Zoetis with an unchanged price target of $200. His view remains constructive despite the recent FDA approval of Merck’s Bravecto Quantum, a new product that some may see as a potential competitor in the parasiticides market.
According to the analyst, Merck’s Quantum medication is unlikely to pose a major threat to Zoetis’s current market standing. Its medication Simparica Trio, which protects against a range of parasites, including heartworms, is already well-established in the U.S. and continues to drive a significant portion of Zoetis’s sales. In contrast, Quantum’s requirement for vet-administered dosing and its inconsistent duration may impact its uptake, especially in the U.S. market.
The analyst also notes that Zoetis could indirectly benefit from Quantum because its injectable heartworm preventive product ‘ProHeart’ could be used alongside Quantum as a combination therapy.
Zoetis Inc. (NYSE:ZTS) discovers, develops, manufactures, and commercializes animal health products, including medicines, vaccines, diagnostic products and services, biodevices, genetic tests, and precision animal health.
1. The Cigna Group (NYSE:CI)
Beta: 0.48
Dividend Yield: 2.3%
Potential Upside: 41%
Number of Hedge Fund Holders: 74
The Cigna Group (NYSE:CI) is one of the best defensive stocks to invest in according to analysts. Cigna shares cracked over 10% on July 31 after the company reported its Q2 2025 quarterly results. Following the results, TD Cowen analyst Charles Rhyee reiterated a Buy rating on Cigna, maintaining a $387 price target. He believes the recent pullback in the shares was overdone and sees current levels as an attractive entry point.
While concerns around performance in the Health Insurance Exchange (HIX) segment weighed on sentiment, Rhyee expects the impact to be limited. He points to strength in other parts of the business, particularly Specialty and Care Services, as well as solid momentum in the company’s Pharmacy Benefit Management (PBM) operations, which should help offset pressures.
Rhyee also noted that management’s Q3 guidance appears cautious, especially considering stepped-up investment in improving patient experience. Still, he remains confident in the company’s earnings outlook, with robust EPS growth projections for 2025 and 2026 supporting his valuation.
The Cigna Group (NYSE:CI) is a health services company that provides medical, pharmacy, behavioural health, dental, and supplemental insurance products.
While we acknowledge the potential of CI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CI and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
