Defensive Dividend Stocks Investors May Prefer After The AI Tech Selloff

The sharp reversal in AI driven tech stocks has left many investors questioning where to look next for stability and income potential. While semiconductor and memory chip stocks such as Micron, Sandisk, and Western Digital have been hit hardest, some investors are turning attention to companies with steady dividends, solid balance sheets, and more moderate price swings. This article looks at how the recent momentum crash and rising macro concerns intersect with a Defensive Value Stocks screener, and reveals 3 stocks from that list that appear more directly exposed to the current news and may warrant a closer look, whether as opportunities or holdings to reassess.

RS Group (LSE:RS1)

Overview: RS Group is a global distributor that supplies industrial customers with the products and services they need to design, build, maintain, and repair equipment, ranging from automation and electrical components to safety gear and facilities supplies, along with digital tools and inventory solutions that help streamline procurement.

Operations: RS Group generates most of its revenue from Other Product and Service Solutions at £2.47b, with its RS PRO private label contributing £414.9m, and sales spread across markets including the UK (£677.8m), the USA (£651.6m), and a broad Rest of World base (£691.2m).

Market Cap: £3.1b

RS Group stands out on the Defensive Value Stocks screener because it blends a broad industrial product offering with traits many investors look for when momentum trades are under pressure, including a 3.42% dividend, an ongoing £100m share buyback and a P/E below both its estimated fair P/E and many peers. The company is using acquisitions and tech investment to improve scale and digital sales, and it is expanding its RS PRO range and automation partnerships, such as recent Industry 4.0 sensor and actuator additions. The flipside is that softer industrial demand, margin pressure from normalizing inflation benefits, and geopolitical exposure could keep results uneven. This makes the current valuation and analyst expectations important to scrutinize closely.

RS Group’s combination of a 3.42% dividend, a £100m buyback and a P/E below its estimated fair P/E raises a clear question. See the DCF valuation analysis for RS Group and find out what the current pricing might be missing.

Coca-Cola FEMSA. de (KOF)

Overview: Coca-Cola FEMSA is a major Coca-Cola bottler in Latin America, producing, marketing and distributing a wide range of soft drinks, water, dairy and other beverages across countries such as Mexico, Brazil, Colombia and Argentina, and supplying everything from supermarkets and convenience stores to restaurants, bars and stadiums.

Operations: Coca-Cola FEMSA generates essentially all of its MX$292.5b in revenue from non alcoholic beverages, with sales concentrated in Mexico (MX$136.1b) and Brazil (MX$83.4b) and additional contributions from markets such as Colombia, Uruguay and Argentina.

Market Cap: US$21.4b

Coca-Cola FEMSA is the kind of defensive, income focused stock many investors consider when fast growing tech trades are under pressure. It combines a wide beverage portfolio, exposure to everyday consumer spending and a 4.28% dividend yield. The stock is trading below some estimates of fair value and below certain analyst cash flow valuations. However, earnings growth has recently softened, net income in Q1 2026 was lower than a year earlier and volumes can be sensitive to weaker consumer confidence in key markets such as Mexico and Colombia. In addition, funding relies entirely on external borrowing and the dividend is not fully covered by free cash flow, so there is more to unpack than a simple consumer staples label suggests.

Coca-Cola FEMSA’s 4.28% yield, everyday products and softening earnings create a story that looks simple on the surface, yet could be more complex once you read the analysis report for Coca-Cola FEMSA. de

Hilton Food Group (LSE:HFG)

Overview: Hilton Food Group is a multi protein food producer that packs meat, seafood, plant based products and ready meals, and also provides supply chain and logistics services for large international food retailers across the UK, Europe and APAC.

Operations: Hilton Food Group generates revenue of about £1.55b from APAC, £1.55b from the UK & Ireland and £1.16b from Europe, with a small inter company offset of £41.5m.

Market Cap: £493.4m

Hilton Food Group attracts attention in a risk off market because it sits in everyday food consumption. It is priced on a P/E below the European Food industry, with analysts seeing a future cash flow value far above the current share price. Expansion with major retailers, a shift toward higher margin, value added products and investments in automation are central to the long term story. Against that, a 6.38% dividend that is not well covered by free cash flow, reliance on external borrowing and execution risk around Canadian and Saudi projects give investors plenty to stress test. The real question is whether today’s pricing fairly reflects these moving parts or leaves room for a re rating once new leadership beds in and recent one off items fade.

Hilton Food Group’s 6.38% yield, its relationships with global retailers and its automation push could be masking a very different long term profile than its current P/E suggests, and the analyst forecasts for Hilton Food Group may reveal the twist investors are missing

The 3 stocks covered here are only a sample of what is on offer, and the full Defensive Value Stocks screener surfaced 25 more companies that pair similar income and value traits with their own distinct narratives that could matter for your portfolio.

Use Simply Wall St to identify and analyze the specific catalysts, dividend profiles, balance sheet strength and risk factors that matter most to you so you can focus on the highest conviction ideas from this defensive value list.

Take Control of Your Investment Journey

If Hilton Food Group or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Alternatives Before Momentum Fades?

Fresh ideas move fast, and the stocks sitting quietly in the next wave of breakouts rarely stay under the radar for long. Before the crowd piles in, consider ways to get in early.

• Spot resilient cash generators before their momentum is widely noticed by scanning the curated list of solid balance sheet and fundamentals (20 results), which may help identify companies that could ride out turbulence while others are dropping.
• Explore potential early upside in companies powering AI behind the scenes using the focused 53 AI infrastructure stocks, while pricing may still reflect older assumptions rather than more recent demand.
• Position ahead of potential demand shifts by tracking the curated 29 best rare earth metal stocks, which highlights suppliers of materials used in critical technologies that may not yet be in the spotlight.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com