Credit Suisse's 14 Ultimate Defensive Stock Picks

Adds that Procter & Gamble has a hiring freeze on for this fiscal year.

BOSTON ( TheStreet) -- Credit Suisse's ( CS) analysts have come up with a "new gold standard" list of stocks.

The companies carry lower risk and pay higher yields than government debt, the Switzerland-based investment bank says. In effect, the shares represent the ultimate defensive play in a time of market volatility, and economic and political uncertainty.

They are all mega-cap multinationals, most with internationally recognizable brand names.

The market is signaling that these stocks are lower risk than government debt because they have lower credit default swap (CDS) spreads than those of the world's seven leading economies, according to the firm's Global Equity Strategy report issued Dec. 16.

The companies also fit the firm's view of a "global rebalancing" that will occur at some point in the future and include a big jump in consumption of goods in emerging markets, especially in Asia, which should boost these firms' earnings. On the losing end will be "creditors (who) are likely to suffer as a consequence of a prolonged period of negative real rates," hence the appeal of stocks over debt.

The list includes seven European-based companies traded in the U.S. via American Depositary Receipts (ADRs), and seven U.S. firms. They're detailed on the following pages:

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Novartis ( NVS)

Company Profile: The company is a Swiss-based health-care giant that makes medicines, preventive vaccines, diagnostic tools, generic pharmaceuticals and consumer health products.

2011 Return: down 6%

Dividend Yield: 3.61%


BASF ( BASFY)

Company Profile: The German company is one of the world's largest chemical firms, with operations in 200 countries. Its products include: chemicals, plastics, agricultural products, oil and gas production and gas distribution.

2011 Return: down 13%

Dividend Yield: 3.42%

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Bayer ( BAYRY)

Company Profile: The company is a German health-care and chemical conglomerate with revenue about evenly divided between the two segments. Health care includes pharmaceuticals, vitamins, blood glucose monitors and animal health products. The chemical side includes a crop-science business that includes pesticides, herbicides and fungicides, as well as a material-science segment that produces plastics, including polyurethane and polycarbonate.

2011 Return: down 18%

Dividend Yield: 2.76%


Pearson ( PSO)

Company Profile: The U.K.-based company is a global publishing company with operations in education, business information and consumer publishing. It generates about 60% of its sales in the U.S. Pearson publishes The Financial Times, business magazines and owns a 61% stake in Interactive Data ( IDC).

2011 Return: up 15.5%

Dividend Yield: 2.49%

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Telenor ( TELNY)

Company Profile: The company, the leading telecommunications operator in Norway, is 54%-owned by the government. It also has large operations in the rest of Scandinavia and various Asian countries. Telenor also owns 33% of VimpelCom, one of the largest telecom operators in Russia.

2011 Return: down 0.6%

Dividend Yield: 4.54%


British American Tobacco ( BTI)

Company Profile: The company sells more than 300 tobacco brands in 180 countries and holds leadership positions in 50 of its markets, making it the third-largest global cigarette seller. Its brands include Dunhill, Kent, Pall Mall and Lucky Strike.

2011 Return: up 23.4%

Dividend Yield: 2.58%

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National Grid ( NGG)

Company Profile: The company is an international utility that provides electricity and gas transmission and distribution in the U.K. and Northeastern U.S. It also operates in power generation, communications infrastructure, metering services and liquefied natural gas storage.

2011 Return: up 15%

Dividend Yield: 4.62%


Intel ( INTC)

Company Profile: The company is the largest computer-chip maker in the world. It develops and manufactures microprocessors and platform solutions for the global personal computer market.

Information technology researcher Gartner said Intel was the semiconductor industry's 2011 sales leader for the 20th consecutive year, with its highest-ever market share at 16.9%. Its previous high was in 1998, when it captured 16.3% of the market.

2011 Return: up 12.7%

Dividend Yield: 3.62%

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Philip Morris International ( PM)

Company Profile: The company is the world's second-largest tobacco company with a 16% share of the non-U.S. market. It owns seven of the top 15 international brands, including the leader, Marlboro, as well as L&M, Philip Morris, Bond Street, Chesterfield, Parliament and Lark.

2011 Return: up 33%

Dividend Yield: 4.07%


McDonald's ( MCD)

Company Profile: One of the world's largest restaurant chains, the company generates revenue through company-owned fast-food restaurants, franchise royalties and licensing pacts. At the end of the third quarter, there were 33,100 McDonald's in 117 countries.

2011 Return: up 30%

Dividend Yield: 2.87%

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Procter & Gamble ( PG)

Company Profile: The company is the world's largest consumer-products manufacturer. Its brands include: Tide laundry detergent, Charmin toilet paper, Pantene shampoo, Cover Girl cosmetics and Iams pet food. In the past decade, P&G has doubled sales from developing markets, and acquired and integrated Wella and Gillette, and sold its pharmaceutical and coffee businesses.

P&G has stopped hiring full-time employees for this fiscal year, a company spokeswoman told Bloomberg today, confirming a report in the Financial Times Deutschland. "We have generally met our hiring goals for this fiscal year, and therefore we are not currently recruiting and hiring," Christine Wever said in an e-mail to the news organization. The FT cited slower-than-expected growth, as the impetus for the hiring freeze.

2011 Return: up 4.5%

Dividend Yield: 3.22%


Kraft Foods ( KFT)

Company Profile: The company is the the second-largest packaged-food company in the world, but its management recently announced its intention to break up the firm into a global snacks business and North American grocery brands. It sells snacks, beverages, cheese and convenient meats, with a product portfolio that includes brand names such as Nabisco, Oscar Mayer, Maxwell House, Jell-O, Chips Ahoy and Kool-Aid.

2011 Return: up 19%

Dividend Yield: 3.18%

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Pfizer ( PFE)

Company Profile: The company is the world's largest pharmaceutical firm, with annual sales near $70 billion. Following the acquisition of Wyeth, prescription drugs now account for close to 90% of sales. Top sellers include cholesterol-lowering Lipitor, Celebrex for arthritis and Viagra for impotence. But recently approved generic forms of Lipitor will reduce revenue in the near term.

2011 Return: up 25%

Dividend Yield: 3.8%


Merck ( MRK)

Company Profile: The company makes pharmaceutical products to treat cardiovascular disease, asthma, infections and osteoporosis. It also has a vaccine business, with treatments to prevent hepatitis B and pediatric diseases. Following the Schering acquisition, about 45% of sales are generated in the U.S.

2011 Return: up 4.9%

Dividend Yield: 4.63%

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>>To see these stocks in action, visit the Credit Suisse's 14 Ultimate Defensive Stock Picks portfolio on Stockpickr.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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