Amid heightened market volatility and geopolitical risk, certain defensive stocks could be poised to outperform. Russia's invasion of Ukraine entered its second week Thursday. Financial markets have been choppy as traders assess the risk of the war. CNBC Pro found defensive names with sales that are primarily confined to the U.S. They also have outsize dividend yields and are well liked on Wall Street, according to data from FactSet. Defensive stocks are shares that tend to be stable regardless of how the overall market performs. We looked for S & P 500 members with a three-year beta of 1 or less, which means these stocks are historically less volatile than the market. When the S & P 500 swings 1% in either direction, these stocks typically move less. Given the conflict in Europe, we also screened for companies with more than 80% of total sales derived from the U.S. From there, we found stocks with a dividend yield higher than the market's 1.31% dividend yield. A dividend is a regular payout of a portion of a company's profits to its shareholders. Dividends are a way for investors to get paid consistently when the market is choppy. CNBC Pro also screened for names a majority of analysts say to buy that are beating the market this year. The S & P 500 is down more than 9% in 2022. Take a look at our list. (Source: FactSet. As of March 4, 2022.) Market strategists typically categorize the utilities, health care and consumer staples sectors as defensive. Utility names feature prominently on CNBC Pro's screen. Dominion Energy , Edison International and Public Service are among the utility companies on the list. Edison International also has the highest dividend yield out of the cohort at 4.1%. CVS Health is a health-care stock that makes the list. The company's sales are 100% domestic and CVS has a 2% dividend yield. L3Harris Technologies , a defense contractor, is the top performer this year of our screen with a 19.8% return. Defense stocks have outperformed recently as the war in Europe is projected to lead to an expansion of defense budgets for the U.S. and allies.
People walk by a CVS Pharmacy store in the Manhattan borough of New York City.
Shannon Stapleton | Reuters
Amid heightened market volatility and geopolitical risk, certain defensive stocks could be poised to outperform.