Investors looking to ride out the market turbulence should turn to high-quality stocks that pay dividends, according to Bank of America. Equities have had a rocky ride this year, particularly after President Donald Trump announced his “reciprocal” tariffs earlier this month. The market rebounded Tuesday after a sharp sell-off on Monday. Volatility is expected to remain elevated thanks to increasing policy uncertainty, Savita Subramanian, Bank of America’s equity and quant strategist, said in a note last week. In addition, Trump’s levies pose inflation risk, she said. “High quality is the best hedge against volatility in our view … and inflation-protected income will likely drive alpha,” Subramanian said. “A traditional high quality dividend yield approach may be prudent.” To find names that fit the bill, the bank looked at stocks in the Russell 3000, excluding financials and real estate due their metric incomparability with other sectors. From these names, Bank of America selected stocks it deems high quality based on the growth and stability of earnings and dividends over a 10-year period. Return on equity for these names was also greater than that of the universe median, while their net debt/equity was lower than the median. In addition, the stocks’ indicated dividend yield was greater than that of the index, and the bank believes potential dividends will likely remain the same or higher. Lastly, the ratio of free cash flow over the last 12 months to indicated dividends must be greater than 1.0. Here are 10 buy-rated names that made the cut. Among the consumer staples stocks on the list is Procter & Gamble , which pays a dividend yield of 2.5%. The sector is typically resilient during economic downturns because consumers still need to buy essential products. Procter & Gamble posted an earnings and revenue beat in January for its fiscal second quarter and is set to release third-quarter results on Thursday. Most analysts rate it a buy or strong buy, and consensus price targets call for nearly 7% upside to the average price target, per LSEG. Shares are about flat this year. Abbott Laboratories has a 1.8% dividend yield and has gained 16% year to date. The medical device company’s adjusted earnings per share for its first quarter beat expectations last week , although revenue came in slightly below estimates. ABT YTD mountain Abbott Laboratories Abbott Laboratories is also focusing on research and development investments in the United States amid the uncertainty around tariffs. During the earnings conference call, CEO Robert Ford said the company was on track to open two new facilities in Illinois and Texas by the end of the year— a $500 million total investment. Analysts are overwhelmingly bullish on the stock, with most rating it buy or strong buy, per LSEG. Consensus price targets call for about 8% upside from current levels. Texas Roadhouse , which has a 1.7% yield, also made the cut. The company posted beats on the top and bottom lines in February for its fourth quarter. It also became the biggest casual dining chain in 2024 , pushing Olive Garden out of the top spot, according to research firm Technomic. The stock is down nearly 10% so far this year. Meanwhile, semiconductor companies have taken a hit amid the back and forth on Trump’s tariffs. Lam Research is no exception, down 12% so far this year. However, the majority of the analysts covering the stock rate it buy or strong buy, according to LSEG. It has 45% upside to the average analyst price target and yields about 1.5%. Lastly, J.B. Hunt Transport Services yields around 1.4% and has lost about 25% year to date. While the transportation giant reported a first-quarter earnings and revenue beat last week, concerns about tariffs are weighing on the company. Spencer Frazier, executive vice president of sales and marketing, said on the earnings conference call that customers are planning for “what if scenarios” regarding the duties and are “waiting for the dust to settle.” Most analysts rate the stock a buy or strong buy, and consensus price targets call for more than 18% upside to the average price target, per LSEG. —CNBC’s Ryan Baker contributed reporting. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
