“In this environment, we expect defensive stocks, such as dividend strategies, to beat the market,” Wolf Research says.
Economic recession is the specter haunting the markets. Federal Reserve Chair Jerome Powell warned last week in Jackson Hole that the central bank is prepared to further raise rates if economic activity declines.
According to analysts at Wolfe Research, high dividend stocks are particularly interesting for investors in this economic context.
“The recession is likely to create downward pressure on stocks, particularly Big Tech,” Wolf Research states “In this environment, we expect defensive stocks, such as dividend strategies, to beat the market ”.
Specifically, the firm recommended buying stocks offering the second-highest yield quintile, a group of companies that have historically outperformed names in the top quintile relative to the benchmark.
The names to keep an eye on are these:
1) CenterPoint Energy
2) Chesapeake Energy
3) Lockheed Martin
4) Merck & Co.
5) McDonald’s Corporation
6) Colgate-Palmolive
7) Skyworks Solutions
8) Dell Technologies
9) Union Pacific
10) Sealed Air
Let’s look at some titles in detail.
In July, CenterPoint Energy reported third-quarter adjusted earnings of 28 cents per share on revenue of $1.88 billion. The company narrowly beat analysts’ expectations of 27 cents a share on earnings and revenue of $1.87 billion, per StreetAccount. The stock has a dividend yield of 2.7%.
10 out of 16 analysts covering CenterPoint rate it a ’buy’ or ’strong buy’, according to Refinitiv.
Skyworks Solutions reported third-quarter adjusted earnings of $1.73 per share, while analysts had expected $1.67 per share, per FactSet. The company also raised its quarterly dividend by 10% to 68 cents per share. The stock currently generates a dividend yield of 2.5%. For approximately 44% of analysts, the stock is rated as ’buy’ or ’strong buy’, according to Refinitiv.
McDonald’s Corporation pays a dividend yield of 2.1%.
Stifel analyst Chris O’Cull raised his price target on the stock to $315 from $300 after McDonald’s released financial results.
About 74% of analysts cover the stock rate as ’buy’ or ’strong buy’, according to Refinitiv.
Original article published on Money.it Italy 2023-08-31 16:10:00. Original title: Dividendi, i 10 titoli da comprare per proteggersi dalla recessione
