Analysts Recommend 10 Global Stocks with Secure and High Dividends Amid Volatile Market
Investors grappling with a volatile market, compounded by geopolitical risks stemming from the Israel-Hamas conflict and uncertainties surrounding rising bond yields and interest rates, are seeking strategies to navigate these challenges. Analysts are suggesting that buying dividend stocks may provide a way forward. Morgan Stanley equity strategist Mike Wilson emphasized in an October 9 report that high-dividend stocks can help investors navigate the current uncertainty. Similarly, BMO noted in an October 4 note that increased volatility is expected in the coming months, and a dividend-focused strategy can help combat this volatility and protect against losses.
For those interested in pursuing this strategy, CNBC Pro conducted a screening process to identify stocks with secure and high dividend yields across the MSCI World, S&P 500, and FTSE All-World ex-U.S. indexes. The screening criteria included a dividend yield above 4%, a dividend payout ratio less than 50%, a debt-to-capital ratio less than 80%, a positive year-to-date return, and an analyst buy rating of more than 50%. Ten global stocks emerged as meeting these criteria, with representation from the energy, auto, and financial sectors.
Among the selected stocks, automaker Stellantis boasted the highest dividend yield at approximately 10% and received a solid 76% buy rating from analysts, who also projected a 28% potential upside. Other automakers that made the cut were Mercedes-Benz, offering the next highest dividend yield at 8.5%, and Hyundai Motor, which had the highest potential upside on the list at 44.4%.
Energy stocks included in the screening process were ConocoPhillips and Diamondback Energy. Prominent investor Bill Nygren of Oakmark Funds recently expressed the view that energy stocks deserve a place in portfolios, particularly during periods of heightened market volatility. This sentiment was reflected in the performance of the S&P 500 energy sector, which surged over 3% on Monday, emerging as the best-performing grouping. The rise was driven by increasing oil prices as investors assessed the impact of the Israel-Hamas conflict.
In summary, analysts are recommending dividend stocks as a strategy to navigate the current market volatility. CNBC Pro's screening process identified 10 global stocks with secure and high dividends that meet specific criteria. Automakers, including Stellantis, Mercedes-Benz, and Hyundai Motor, as well as energy stocks like ConocoPhillips and Diamondback Energy, were among those that made the cut. The performance of the energy sector further underscores the potential of energy stocks during volatile market conditions.
Implications of Analysts' Recommendations on New Business Formation
The volatile market, influenced by geopolitical risks and uncertainties surrounding rising bond yields and interest rates, presents a challenging landscape for investors. In response, analysts are recommending the purchase of high-dividend stocks as a strategy to navigate these challenges. This approach offers valuable insights for new businesses.
Lessons from High-Dividend Stocks
High-dividend stocks, as suggested by Morgan Stanley's Mike Wilson and BMO, can provide a buffer against market volatility. For new businesses, this strategy underscores the importance of maintaining a strong financial foundation. By focusing on building a robust financial structure, new businesses can better weather market uncertainties.
Screening for Secure and High Dividend Yields
The screening process conducted by CNBC Pro revealed ten global stocks with secure and high dividends. These stocks, which span the energy, auto, and financial sectors, met specific criteria, including a dividend yield above 4% and a positive year-to-date return. For new businesses, this screening process highlights the importance of meeting key financial benchmarks to attract investors.
Among the selected stocks, automaker Stellantis and energy companies ConocoPhillips and Diamondback Energy stood out. These companies not only boast high dividend yields but also received solid buy ratings from analysts. For new businesses, these companies serve as examples of how strong financial performance and investor confidence can lead to success, even in a volatile market.
In light of these analyst recommendations and the performance of the selected stocks, new businesses should consider focusing on building a strong financial foundation and meeting key financial benchmarks. These strategies can help new businesses navigate market volatility and attract investors.
.svg)
