As stock multiples have drifted to the highest levels in years and as the Dow Jones Industrial Average hits new highs, we are hearing warnings from market strategists on the pricey market. In a new report from Jefferies, the firm continues to caution against the higher multiple stocks, given their correlation to margin financing and rising two-year rates. The current economic environment, however, does not appear to support an overweight position in defensive stocks like utilities. What they do suggest is to focus on the top themes for the rest of the year and the stocks that look poised to benefit.

We screened the top Jefferies theme stocks for large cap names with lower price-to-earnings multiples and dividends. Here are some of the top names to buy.

Baker Hughes Inc. (NYSE: BHI) is ranked as a top theme top pick at Jefferies as the firm sees an improved environment for oil and gas services companies. The company recently announced that it would acquire Performix, which is an oilfield software technology company that provides tools that enhance the performance of oil and gas reservoirs. This acquisition will help the company cater to oil and gas companies that are focused on maximizing and improving the productivity of current and new wells. Investors are paid a 1% dividend. The Jefferies price target for the stock is $83. The Thomson/First Call estimate is at $76.67. Baker Hughes closed Monday at $70.10 a share.

READ MORE: Credit Suisse Identifies Big Merger Candidates in Retail

Freeport-McMoran Copper & Gold Inc. (NYSE: FCX) was battered last year as investors fled mining companies. Jefferies sees copper prices continuing to rise, and demand from China could also continue to grow, as a huge theme. The company is also entering the U.S. oil and gas space, and recently it announced a $1.4 billion buy for deepwater assets in the Gulf of Mexico. Overall global growth may provide a tailwind for the stock, which trades at a low 13.85 times trailing earnings. Investors are paid a 3.7% dividend. Jefferies has a $45 price target, and the consensus target is $39.39. The stock closed Monday at $34.89.

Ingersoll-Rand PLC (NYSE: IR) is a top industrial name showing up on the stocks to buy lists at many of the major Wall Street firms we cover. With the housing market continuing to grow this year, the company’s wide range of portfolio products should continue to sell well. Jefferies also sees growth in commercial real estate construction helping this top name. Investors are paid a 1.7% dividend. Jefferies has posted a $75 price target, and the consensus price objective is $65.56. Ingersoll-Rand closed Monday at $59.24.

Intel Corp. (NASDAQ: INTC) has a Buy rating at Jefferies. The stock has been caught in a ratings tug-of-war on Wall Street, but many firms believe the Silicon Valley giant is poised to breakout of its multiyear slump. The Jefferies team sees information technology orders starting to gain traction on a year-over-year basis. Also a new commitment to smartphone and mobile applications, combined with a possible resurgence of PC growth this year, may make Intel one of the best large cap value stocks to buy. Intel trades at a very low 13.5 times forward earnings. Investors are paid a solid 3.4% dividend. Jefferies has a $35 target, while the consensus target is $25.05. Intel closed Monday at $26.37.

READ MORE: Recent Analyst Stock Picks Under $10 for Big Upside

3M Company (NYSE: MMM) is a quality industrial name on the Jefferies list of theme stocks to buy. The Jefferies analysts point out that the company is closely correlated to U.S. leading economic indicators. The more the indicators continue to improve, the higher the likelihood of strong earnings performance for company the rest of the year. Investors are paid a solid 2.4% dividend. The Jefferies price target for the stock is $150, and the consensus is at $144.19. 3M closed Monday at $142.82.

All the Jefferies theme stocks make good sense for investors looking for total return additions to their portfolio. The large market caps and solid dividends also make them far less likely to be caught up in another momentum stock sell-off. After the past couple of months, that may be welcome news for stock investors weary of the volatility.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.