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Sometimes you have to play defense. The stock market has been rocked with uncertainty in 2025, with many of the perennial megacap winners falling out of favor and defensive names stepping up. For months, Wall Street has ruminated on whether President Donald Trump ‘s tariffs will cause a recession and how the Federal Reserve may respond. While stocks have recovered over the past month following the White House’s 90-day pause on most higher tariffs and further signs of progress in trade negotiations, the S & P 500 has not been able to erase its year-to-date losses of nearly 4%. The index closed off its Thursday highs after Trump announced a trade deal with the UK and then ran out of steam Friday ahead of U.S.-China tariff talks this weekend. We’re glad the Club portfolio has stakes in companies that are not only well-positioned to navigate the current volatility but also resilient enough to withstand an economic downturn. Take Linde , for example. It’s one of the portfolio’s most defensive stocks, so it’s no surprise that it’s also our best-performing industrial-focused name in 2025 and No. 4 overall. LIN YTD mountain Linde YTD Shares of the industrial gas supplier are up roughly 8% year-to-date, handily outperforming the broader market. Investors like the company’s defensive qualities. For starters, Linde continues to have immense pricing power not only because it’s in an oligopolistic industry but also because its products are crucial regardless of the macro environment. Industrial gases are used in all kinds of commercial applications, from energy to food and beverage to health care to electronics — just to mention a few. Plus, if the economy worsens, Linde tends to still perform well during periods of slower growth. The firm can pass rising input and operational costs directly to its customers due to terms in its long-term contracts. That means Linde can maintain its profit margins. Case in point: Management has delivered 25 consecutive quarters of earnings beats and said on last week’s post-earnings call that two-thirds of its sales are not connected to economic trends. Our other industrial name have defensive properties as well, less so than Linde, which might explain why their stocks are not doing as well. HON YTD mountain Honeywell YTD Club holding Honeywell has its hand in end markets that are less affected by economic cycles. In fact, Bank of America upgraded the stock to a buy rating from a hold earlier this week for that exact reason. “Given the company’s defensive business mix, we believe the company’s guide is achievable and it will be able to maintain or even modestly raise [its] guide in 2025,” the analysts wrote in a Wednesday note. “In a recession scenario, we think HON would need to lower its guide by less than peers.” In February, Honeywell announced plans to split aerospace and automation into separate publicly-traded companies. The move, expected to be completed in the second half of next year, came after pressure from activist investor Elliott. Honeywell’s previously announced spin-off of its advanced materials unit is on track for the first half of 2026. It’s not all roses for Honeywell, though. The company’s short-cycle businesses such as warehouse automation within its industrial automation unit have been lackluster for several quarters. Management was even forced to cut numbers last year because it guided for a short-cycle recovery that failed to materialize. Honeywell has learned from its mistakes, delivering a sensible forecast during its April 29 quarterly earnings report. Year to date, the stock has lost more than 5%. ETN YTD mountain Eaton YTD Eaton, a maker of power management solutions for AI data centers, is another industrial name with defensive qualities. The company has exposure to several megatrends such as electrification and the energy transition, which can make it less sensitive to different economic cycles. This means more enduring demand in its Electrical Americas, Electrical Global, and Aerospace segments. Plus, Eaton has a huge backlog from long-term projects. Those aren’t likely to get cancelled because of short-term macro headwinds. There is still some risk, though. Eaton derives roughly 17% of its total revenues from data centers, according to the company’s 2025 growth assumptions. Spending in this end market could soften if the economy worsens and larger hyperscalers conserve capital and pull back on their AI plans. Eaton is still clawing its way back from the DeepSeek selloff that started in late January. The stock has declined over 6% in 2025. DOV YTD mountain Dover YTD Then, there’s Dover. For starters, the company has a lot of extra capital that can help it better weather a downturn. Dover ended the first quarter with $2.8 billion of dry powder, and $1.5 billion of that was in excess cash alone. Management’s preferred use of cash, however, is typically value-creating deals such as acquisitions. Dover announced Monday its intent to buy German-based company Sikora for $622 million to further its data center ambitions. But the company’s pumps and process solutions segment is more defensive in nature. That’s because this business serves a broad range of industries and sells products that are typically non-discretionary. This includes offerings like compressors, valves, and sealing systems, which are critical for natural gas and energy infrastructure. DD YTD mountain DuPont YTD DuPont is our least defensive name, or perhaps most sensitive to changes in the macro economy. It’s also our worst-performing industrial stock in 2025 – down more than 12%. Investors have not only been concerned about the impact of Trump’s tariffs on DuPont’s China market, but also about the ramifications of a deteriorating economy on its financials, particularly given the cyclical nature of its consumer electronics and autos businesses. At the same time, there are some secular growth aspects to DuPont’s electronics division because of its role in the data center buildout and artificial intelligence adoption. DuPont’s water and health-care businesses are bright spots as well, offering essential products needed regardless of the macro environment. The water solutions business, for example, provides technologies for water purification across various industries. The health-care business creates materials for biopharma processing and medical devices. All of these have enduring demand. On Wednesday, the Club lowered its DuPont price target to $82 apiece from $100 because of lower peer multiples ahead of the company’s forthcoming breakup into two separate publicly traded entities. DuPont’s electronics division will be its own company, while the new, leaner DuPont will house its water, healthcare and other remaining businesses. (Jim Cramer’s Charitable Trust is long LIN, HON, DD, DOV, ETN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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Tanks of hydrogen stand near a hydrogen electrolysis plant.
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Sometimes you have to play defense.
