When most people think about defensive stocks, they think dividend-paying, stable large caps. That's fine, but many mid-cap stocks -- defined as a market cap between $1 billion and $10 billion here -- offer the same characteristics without being as high-profile.

I ran the CAPS Screener to look for defensive stocks in the mid-cap universe. Specific search parameters I ran included:

  • Market capitalization between $1 billion and $10 billion.
  • CAPS rating of four or five stars (out of five).
  • Price-to-earnings positive and less than 15.
  • Long-term debt-to-equity ratio of 1 or less (manageable debt levels to deal with trouble).
  • Current dividend yield between 2.5% and 6% (a reasonable dividend provides price support and income, while a high dividend can be unsustainable or a sign of trouble).
  • Earnings growth greater than 5% over the past three years.
  • Beta -- a measure of volatility relative to the market -- less than 1.0.

The screen returned 15 stocks across a number of sectors, including the following seven. 

Company Name

Debt-to-Equity Ratio

Dividend Yield

Beta
(3-Year)

PE (TTM)

CAPS Rating (out of 5)

Sector

Cleco (NYSE: CNL)

1.00

3.2%

0.41

12.4

*****

 Utilities
Hanover Insurance Group (NYSE: THG)

0.35

3.2%

0.46

14.4

****

 Financial
j2 Global Communications (Nasdaq: JCOM)

0

2.6%

0.77

13.6

****

 Technology
Mattel (Nasdaq: MAT)

0.39

3.5%

0.98

13.5

****

 Consumer Goods
Molson Coors Brewing (NYSE: TAP)

0.24

3%

0.73

11.9

*****

 Consumer Goods
Rent-A-Center (Nasdaq: RCII)

0.48

2.5%

0.83

10.7

****

 Services
Teleflex (NYSE: TFX)

0.49

2.5

0.73

10.3

****

 Health Care

*Source:  Motley Fool Stock Screener. As of Sept. 5.

These stocks represent a variety of sectors and business models, but all share strong balance sheets, good dividend yields, less than market volatility, reasonable valuations, and high ratings from our CAPS community. I also checked out dividend-payout ratios, and Mattel's ratio of 66% was the only one over 50%.

Don't forget the mid-cap world when exploring for stable, dividend paying stocks. There are plenty of quality stocks outside large-cap land, including some well-known names. As a bonus, smaller companies don't have the coverage of the big names, so there's a better chance of finding an underfollowed bargain.

Like any screen, these results should be considered a starting point for further research and not an outright buy recommendation.

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