Barron's picks 15 stocks including Wendy's to beat a bear market

Barron's identified 15 stocks capable of outperforming during a bear market, applying three defensive approaches to stock selection.

"These three approaches will work at any time — though investors might especially favor them today if they fear a market drop is imminent," Barron's said in the report published Tuesday.

The list includes Wendy's, which offers a 7.1% dividend yield, alongside 14 other companies selected for their defensive characteristics. The fast-food chain's shares have fallen nearly 40% over the past year and touched a 20-year low this week, making the valuation case more compelling for income-focused investors. Wendy's reported a 5.5% drop in global sales during the first quarter, with U.S. same-store sales falling 7.8%, as consumers cut discretionary spending.

The recommendations come as investors debate the durability of the current bull market. The three frameworks provide a structured approach to portfolio defense, giving investors specific criteria for stock selection during periods of heightened uncertainty.

Wendy's inclusion on the list highlights the role of high dividend yields as a defensive tool. The company's 7.1% payout offers income as a buffer against potential price declines, a characteristic that becomes more valuable when capital appreciation is uncertain. The stock's nearly 40% decline over the past year has pushed its dividend yield higher, creating what Barron's considers an attractive entry point for long-term investors.

The report's publication follows a difficult period for the fast-food chain. Wendy's has struggled with declining customer traffic and aggressive pricing competition from rivals such as McDonald's and Burger King. First-quarter global sales fell 5.5%, while U.S. same-store sales dropped 7.8%, reflecting the pressure on consumer discretionary spending. Profit margins were also squeezed by higher food costs and lower customer volumes.

Barron's broader list spans companies across multiple sectors, reflecting a diversified approach to bear-market defense. The three selection frameworks are designed to work in combination, allowing investors to build portfolios that balance income generation, business stability and pricing power. The report did not disclose the full list of 15 stocks.

The focus on defensive stock selection comes as the S&P 500 faces competing narratives about the direction of monetary policy and consumer health. Elevated short interest in Wendy's — at 26.4% of shares outstanding, according to Koyfin data — adds a layer of complexity for investors weighing the stock's defensive credentials against its near-term operational challenges. For income-focused portfolio managers, the question is whether Wendy's 7.1% dividend yield provides enough cushion to justify holding through a potential turnaround that could take several quarters to materialize.

This article is for informational purposes only and does not constitute investment advice.