Jefferies highlights the current market volatility driven by factors such as the Iran war, fluctuating oil prices, and inflation, which have created uncertainty for investors despite the major indexes being up for the year. Analyst Desh Peramunetilleke notes that the volatility in AI stocks has increased due to concerns about return on investment and potential overcapacity.
He suggests that low volatility stocks with high dividends or free cash flow yields could provide a safer investment option. Companies like Procter & Gamble, Pfizer, Simon Property Group, and KeyCorp have been identified as potential candidates, each meeting criteria such as a market cap over $10 billion and a forward dividend yield above 3%.
Procter & Gamble, with a 3% yield, is expected to report strong earnings, while Pfizer, despite being down 2% year-to-date, offers a 6.9% yield and has recently received FDA approval for a cancer treatment. Simon Property Group, a real estate investment trust, has a 4.30% yield and has raised its full-year guidance, while KeyCorp has a 3.8% yield and is also expected to report positive earnings.
These stocks may serve as a buffer against potential market corrections as investor sentiment shifts