Stifel Has Big Second-Half Stock Market Concerns: 5 Defensive Value Dividend Stocks Buys

If there is one voice on Wall Street that we always listen to, it is Stifel’s Barry Bannister, and with good reason. We have watched and documented his market calls for years, some of which are among the most incredible and courageous ever made by a sell-side research chief equity strategist and his staff.

For instance, in the first quarter of 2020, as the COVID-19 pandemic unfolded, the stock market suffered a huge decline, dropping a stunning 34% from its high on February 19, 2020, to its low on March 23. Into the teeth of the withering sell-off, Bannister and the Stifel team had the foresight to predict a strong market bounce. On March 19, just four short days before the final surge of selling and investor capitulation on March 23, Stifel’s prediction was for a relief rally, which materialized in a big way.

We think it is time to listen to Bannister and his staff again.

Near the end of 2024, Bannister and his team cited the massive two-year rally that had printed back-to-back 20% plus moves for the S&P 500 for the first time since the mid to late 1990s and a stunning 30% jump for the Nasdaq on the back of an artificial intelligence-driven frenzy tech rally as a catalyst. Then he thought the stoplights were flashing yellow, and with good reason. With the S&P 500 trading at multiples substantially higher than the median over the past 50 years, it was only a matter of time. Sure enough, in mid-February, the selling started in a big way and didn’t end until early April, following a massive double-digit decline.

Citing what they call the S&P 500 price-to-earnings mania, Stifel is once again recommending that what it calls “defensive value” be the optimal place to be for the remainder of 2025. The firm noted this in its recent research report:

• We continue to expect sharply slowing U.S. core GDP and believe the “Tech is defensive” narrative is at risk in the second half of 2025. The U.S. consumer, buoyed by COVID-era fiscal and tight labor markets, followed by an A.I. build-out, has underpinned the notion since 2021 that Big Tech is largely immune to economic volatility.
• Busting that narrative”, we forecast downside risk for GDP and Big Tech in the second half of the year due to a consumer pullback resulting from pressure on real (after inflation) wage income, along with reduced fixed investment (since 2021, 53% of all non-residential fixed investment was Technology).
• We view the recent counter-trend rally as an opportunity to add exposure to Defensive Value – specifically Staples, Healthcare, Utilities, Quality – as we forecast a lower S&P 500 P/E ratio and earnings-per-share pressure in the second half of 2025.

We screened the Stifel Defensive Value research database, which was coined by Barry Bannister, looking for stocks that Stifel has Buy-rated. We identified five top stocks that are ideal investments for the second half of 2025.

Abbott Laboratories

This healthcare giant currently presents an excellent investment opportunity for investors. Abbott Laboratories Inc. (NYSE: ABT) is engaged in the discovery, development, manufacture, and sale of a broad and diversified line of healthcare products. It operates through four segments.

The Established Pharmaceutical Products segment is engaged in the international sales of a broad line of branded generic pharmaceutical products.

The Diagnostic Products segment is engaged in the worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories, and alternate-care testing sites.

The Nutritional Products segment is involved in the worldwide sales of a broad line of adult and pediatric nutritional products.

The Medical Devices segment includes the worldwide sales of:

• Rhythm management
• Electrophysiology
• Heart failure
• Vascular
• Structural heart
• Neuromodulation
• Diabetes care products

Stifel has a Buy rating on the shares and a $145 price objective.

Altria

This is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products. Altria Group Inc. (NYSE: MO) stock offers defensive value investors a great entry point. The company operates a portfolio of tobacco products for United States tobacco consumers aged 21 and above.

Its segments focus on smokeable products and oral tobacco products. The smokeable products segment consists of combustible cigarettes and machine-made large cigars, while the oral tobacco products segment includes moist smokeless tobacco (MST) products and oral nicotine pouches.

Its wholly owned subsidiaries include manufacturers of both combustible and smoke-free products. In combustibles, it owns Philip Morris USA and John Middleton, which are cigarette manufacturers. Its smoke-free portfolio includes ownership of:

• U.S. Smokeless Tobacco Company, a global MST manufacturer
• Helix Innovations, a manufacturer of oral nicotine pouches
• NJOY, an e-vapor manufacturer with a commercialized product portfolio

The brand portfolios of its operating companies include:

• Marlboro
• Black & Mild
• Copenhagen
• Skoal
• on!
• NJOY

Stifel’s Buy rating comes with a $63 target price.

Mondelez

This consumer staples giant is an American multinational confectionery, food, beverage, and snack food company based in Chicago. This stock makes good sense for conservative investors. Mondelez International Inc. (NASDAQ: MDLZ) manufactures and markets snack food and beverage products worldwide.

The company offers a range of products, including biscuits (such as cookies and crackers), salted snacks, chocolates, gums, candies, powdered beverages, coffee, cheese, and grocery items. Its primary brand portfolio includes:

• Oreo
• Ritz
• LU
• CLIF Bar
• Tate’s Bake Shop biscuits and baked snacks
• Cadbury Dairy Milk
• Milka
• Toblerone chocolate

Mondelez sells its products to:

• Supermarket chains
• Wholesalers
• Supercenters
• Club stores
• Mass merchandisers
• Distributors
• Convenience stores
• Gasoline stations
• Drug stores
• Value stores
• Retail food outlets through direct store delivery, company-owned and satellite warehouses, distribution centers, and other facilities, as well as independent sales offices and agents.

Mondelez was formerly known as Kraft Foods and changed its name in October 2012.

Stifel has a price target of $71 for the shares.

Northwest Natural Holding

This small-cap company provides natural gas service to approximately 2.0 million people in more than 140 communities. Its off-the-radar utility stock suits worried conservative investors, as it comes with a dependable dividend. Northwest Natural Holding Co. (NYSE: NWN), through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington.

The company also operates 5.7 billion cubic feet of the Mist gas storage facility contracted to other utilities and third-party marketers. It offers natural gas asset management services and operates an appliance retail center. In addition, it engages in gas storage, water, non-regulated renewable natural gas, and other investments and activities.

The company provides natural gas service through approximately:

• 786,000 meters in Oregon and southwest Washington
• Water services to about 80,000 people through about 33,000 water and wastewater connections in the Pacific Northwest and Texas

The Stifel price target is posted at $45.

Zimmer Biomet

Stifel sees some big upside potential for this healthcare giant. Zimmer Biomet Holdings Inc. (NYSE: ZBH) is a global medical technology company.

Its segments include:

• Americas
• Europe, the Middle East, and Africa
• Asia Pacific

The company designs, manufactures, and markets:

• Orthopedic reconstructive products
• Biologics, sports medicine, extremities, and trauma products
• Craniomaxillofacial and thoracic products
• Surgical products
• A suite of integrated digital and robotic technologies that leverage data, data analytics, and artificial intelligence

Its products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues.

Its knee brands include the Persona Knee, NexGen Knee Implants, Vanguard Knee, and Oxford Partial Knee.

The hip brands include the Taperloc Hip System, Avenir Complete Hip System, Arcos Modular Hip System, and G7 Acetabular System.

Its S.E.T. product category includes sports medicine, biologics, foot and ankle, among others.

The Stifel target price for the company is $115.

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