Goldman's defensive stocks with quality-growth characteristics

Goldman Sachs is recommending defensive stocks with quality-growth characteristics for investors worried that the recent deterioration in the growth outlook could lead to further downside.

Strategist Ben Snider highlighted 23 Russell 1000 (IWB) stocks in the Health Care (XLV) and Consumer Staples (XLP) sectors that combine relatively low realized share-price volatility with high free-cash-flow yields versus sector peers.

Goldman's base case still calls for an acceleration in real income growth in 2027, particularly among lower-income consumers, supporting a potential catch-up trade in consumer-facing laggards. But for investors concerned about a broader “catch-down,” Snider said the defensive screen offers quality exposure if growth weakens further.

Russell 1000 Defensive Stocks with Quality Attributes

Company (Ticker)	Trailing 4Q FCF Yield
Tyson Foods, Inc. (TSN)	11%
Royalty Pharma Plc (RPRX)	9%
CVS Health Corporation (CVS)	9%
J.M. Smucker Company (SJM)	9%
Kroger Co. (KR)	8%
Cardinal Health, Inc. (CAH)	8%
HCA Healthcare Inc (HCA)	7%
Hormel Foods Corporation (HRL)	7%
Performance Food Group Co (PFGC)	6%
Sysco Corporation (SYY)	6%
Kenvue, Inc. (KVUE)	6%
Hershey Company (HSY)	6%
US Foods Holding Corp. (USFD)	5%
Merck & Co., Inc. (MRK)	5%
ResMed Inc. (RMD)	5%
Quest Diagnostics Incorporated (DGX)	5%
Chemed Corporation (CHE)	5%
Abbott Laboratories (ABT)	5%
Mondelez International, Inc. (MDLZ)	4%
McKesson Corporation (MCK)	4%
Church & Dwight Co., Inc. (CHD)	4%
AbbVie, Inc. (ABBV)	4%
Colgate-Palmolive Company (CL)	4%

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