ZACKSยท2025-10-11 02:11Group 1: Market Overview - Resurfaced tensions between the U.S. and China have led to a significant market reaction, with the S&P 500 and Nasdaq falling over 2% due to President Trump's announcement of a 100% tariff on Chinese goods starting November 1 [1] - The tariff decision was influenced by China's aggressive stance in ongoing trade talks, including new export controls on the U.S. [1] Group 2: Defensive Investment Opportunities - In light of market volatility, investors are seeking defensive stocks to safeguard their portfolios [2] - The medical sector has been highlighted as a defensive position, with companies like Gilead Sciences (GILD) and Johnson & Johnson (JNJ) performing well [3] Group 3: Company Performance - Gilead Sciences and Johnson & Johnson are near their 52-week highs, with both stocks up more than 25% year to date, driven by strong drug pipelines [4] - Both companies offer attractive dividends around 2.7%, surpassing the Zacks Medical sector average of 1.47% and the S&P 500 average of 1.1% [5] Group 4: Kroger's Position in Retail - Kroger (KR) is recognized as a defensive investment, with its stock up 13% in 2025 despite earlier tariff concerns [9] - Kroger's stock trades at a reasonable 14X forward earnings multiple and under 2X sales, indicating strong value [9] - The company has shown steady growth, earning an overall "A" VGM Zacks Style Scores grade for Value, Growth, and Momentum, along with an annual dividend yield of over 2% [10] Group 5: Dividend Metrics - Kroger's annual dividend is $1.40 with a yield of 2.07%, and it has a 15.24% annualized dividend growth rate over the last five years [11] - The company's payout ratio stands at 28%, suggesting potential for future dividend increases [10][11] Group 6: Investment Outlook - Gilead Sciences, Johnson & Johnson, and Kroger are positioned as viable defensive investments, currently holding a Zacks Rank 3 (Hold) [12]