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UBS analysts came up with a list of high-quality stocks — compared to their peers — that pay a dividend that seems unlikely to be cut.
Analysts forecast a 21.8% probability of a dividend cut across regions and sectors, but U.S. stocks have the lowest probability of a dividend cut, according to UBS quant models.
“The U.S. continues to be the safest region for dividends, in our view, with the probability of a dividend cut at 6.6% (-0.1% vs. previous quarter),” wrote Analyst Claire Jones in a report.
In addition, most U.S. sectors are relatively safe from dividend cuts, except real estate (XLRE) and consumer staples (XLP).
Japan (EWJ) is the most preferred region for dividend growth, with a forecast growth rate of 10%. Aside from Japan, the rest of the Pacific region had negative dividend growth prospects. Also, real estate in Europe has the worst growth forecast at -11.1%.
Finally, analysts said that over the second quarter, this basket of stocks outperformed lower yielding stocks in Asia, excluding Japan (AAXJ), emerging markets (EEM) and Europe (VGK), (FEZ).
High quality Japanese stocks with paying dividends performed the worst at -2.3%, and relative to history, dividend yields are expensive in Europe and cheap in the U.S., the report said.
These are the total high-quality global stocks list that pay dividends:
- Omnicom Group Inc. (OMC) – Dividend yield: 3.6%
- Home Depot Inc. (HD) – Dividend yield: 2.7%
- Fuyao Glass Industry Group Co. (OTCPK:FYGGY) – Dividend yield: 3.9%
- McDonald’s Corp. (MCD) – Dividend yield: 2.7%
- Cie Generale des Etablissements Michelin SA (OTCPK:MGDDF) – Dividend yield: 5.3%
- Accor SA (OTCPK:ACRFF) – Dividend yield: 4.5%
- Anhui Gujing Distillery Co., Ltd. Class A [Not covered] – Dividend yield: 3.2%
- Hershey Co. (HSY) – Dividend yield: 2.7%
- Bunge Global SA (BG) – Dividend yield: 2.6%
- Sysco Corp. (SYY) – Dividend yield: 2.9%
- Halliburton Co. (HAL) – Dividend yield: 2.1%
- SLB (SLB) – Dividend yield: 2.4%
- Exxon Mobil Corp. (XOM) – Dividend yield: 3.4%
- Chevron Corp. (CVX) – Dividend yield: 4.3%
- HF Sinclair Corp. (DINO) – Dividend yield: 3.7%
- W. R. Berkley Corp. (WRB) – Dividend yield: 2.5%
- Itau Unibanco Holding SA (ITUB) – Dividend yield: 11.5%
- AIB Group Plc (OTCPK:AIBRF) – Dividend yield: 6.5%
- Commerzbank AG (OTCPK:CRZBF) – Dividend yield: 4.2%
- Wells Fargo & Co. (WFC) – Dividend yield: 2.6%
- DBS Group Holdings (OTCPK:DBSDF) – Dividend yield: 6.8%
- Deutsche Boerse AG (DB) – Dividend yield: 2.2%
- CME Group Inc. Class A (CME) – Dividend yield: 5.1%
- JPMorgan Chase & Co. (JPM) – Dividend yield: 2.3%
- Citizens Financial Group, Inc. (CFG) – Dividend yield: 4.9%
- American International Group, Inc. (AIG) – Dividend yield: 2.3%
- Johnson & Johnson (JNJ) – Dividend yield: 3.3%
- Cardinal Health, Inc. (CAH) – Dividend yield: 2.1%
- Merck & Co., Inc. (MRK) – Dividend yield: 2.3%
- Cummins Inc. (CMI) – Dividend yield: 2.3%
- Yutong Bus Co., Ltd. Class A [Not covered] – Dividend yield: 5.7%
- Epiroc AB Class A (OTCPK:EPOKY) – Dividend yield: 2.2%
- Wartsila Oyj Abp (OTCPK:WRTBF) – Dividend yield: 2.4%
- PACCAR Inc (PCAR) – Dividend yield: 3.8%
- Microchip Technology Incorporated (MCHP) – Dividend yield: 2.2%
- Texas Instruments Incorporated (TXN) – Dividend yield: 3%
- Zijin Mining Group Co., Ltd. Class H (OTCPK:ZIJMF) – Dividend yield: 3.4%
- China Hongqiao Group Ltd. (OTCPK:CHHQF) – Dividend yield: 9.3%
- JFE Holdings, Inc. (OTCPK:JFEEF) – Dividend yield: 5%
- Prologis, Inc. (PLD) – Dividend yield: 3.4%
- Equinix, Inc. (EQIX) – Dividend yield: 2.4%
- SBA Communications Corp. Class A (SBAC) – Dividend yield: 2.1%
- Sempra (SRE) – Dividend yield: 3.6%
- Essential Utilities, Inc. (WTRG) – Dividend yield: 3.6%
- NiSource Inc. (NI) – Dividend yield: 3.8%