BOSTON ( TheStreet) -- The S&P 500, the broadest benchmark for U.S. stocks, has fallen more than 10% since reaching a 19-month high in April on concern about slower-than-expected economic growth in the U.S. and China, and Europe's spreading debt crisis.

And Dow members Caterpillar ( CAT), General Electric ( GE) and American Express ( AXP) tumbled more than 4% in intraday trading Friday.

While some risk-averse investors may be skipping out on equities for fear the stock-market correction will turn into a bear market, there are defensive Dow stocks that can cushion the blow and outperform their peers on the benchmark index of the 30 largest U.S. companies.

Stocks with limited risks and a strong dividend will hold their value better than most in a downturn. While they won't pop in a turnaround as much as riskier shares will, the following five Dow companies are the cream of the crop in any conditions.

An analysis of the select Dow companies begins on the next page, along with charts that highlight their relative strengths.
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Johnson & Johnson ( JNJ)

Beta: 0.63

Estimated P/E: 11.26

Dividend Yield: 2.98%

Johnson & Johnson is categorized as a pharmaceutical company, but with only about a third of its revenue coming from drugs, it's not as risky as its rivals. The stock has a beta value of just 0.63, suggesting it should fall about 0.63% for every 1% that the broader market declines.

While unpredictable events like the recent Tylenol recall will hurt the stock in the short run, Johnson & Johnson will be less volatile over a longer period.

Wal-Mart ( WMT)

Beta: 0.52

Estimated P/E: 11.67

Dividend Yield: 3.78%

The world's biggest retailer carries a beta value of just 0.52, making it even less sensitive to stock-market swings than Johnson & Johnson is. The company's dividend yield of almost 4% offsets the muted stock performance, making Wal-Mart as close to a bond as a stock can get. Wal-Mart has sailed through the recession with performance that's basically flat versus large losses in the S&P 500.

While no one will get rich with this stock, Wal-Mart offers equity-market exposure and a bullet-proof dividend, backed up by an $8 billion cash hoard.

McDonald's ( MCD)

Beta: 0.63

Estimated P/E: 13.73

Dividend Yield: 3.15%

Big Macs, for better or worse, are enjoyed the world over. The cheap burgers make McDonald's a haven in hard times, and the Golden Arches rewards investors with a solid dividend of about 3.15%. McDonald's has performed phenomenally well in the past two years, as the graph above shows. Many people may be watching their waistlines, but the dollar menu is just too good to pass up when times are tough.

Expect McDonald's performance to slow as its price-to-earnings ratio approaches that of the S&P 500, suggesting there's little value left in the stock. Still, with its beefy dividend and low beta value, Mickey D's is a great investment for those uncertain about the stock market's prospects.

Kraft ( KFT)

Beta: 0.65

Estimated P/E: 12.58

Dividend Yield: 3.84%

Four of five stocks on this list are in some way connected to food -- and that's no coincidence. People have to eat, after all. Kraft pays the biggest dividend on the list, at 3.84%, making it a tasty investment for those looking for income-producing stocks. The stock is trading at a discount, compared with the broader market, making it an attractive value play.

Like the other stocks on the list, its beta suggests a low sensitivity to the equity market. It's much lower than the Dow's average of 0.97. Kids will always clamor for mac 'n' cheese, so Kraft is a surefire winner regardless of economic conditions.

Coca-Cola ( KO)

Beta: 0.65

Estimated P/E: 13.78

Dividend Yield: 3.02%

Coke is extraordinarily diversified geographically, which may be cause for concern considering the tensions in Asia and the trouble in Europe. Still, Coke sells a cheap product that enjoys a huge market share, making it relatively immune to downturns.

Coke isn't usually the first thing that gets cut from the family budget when belt tightening begins. That can be seen in the beta value of 0.65. Warren Buffett is a big Coke backer, and you should be, too, if you're looking for a stable and defensive holding.

-- Reported by David MacDougall in Boston.

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Prior to joining TheStreet Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.