With a rocky start to 2025, quality stocks with reliable dividends may become more attractive. The first trading day of the new year marked a volatile day for the stock market, with all three major indexes falling after opening higher on Thursday. The S&P 500 and Nasdaq Composite have now declined for five consecutive sessions, their longest losing streak since April, while the Dow Jones Industrial Average has declined for a fourth consecutive session. Against this market backdrop, UBS screens for stocks that are high quality relative to their peers and are unlikely to cut their current dividend payments. Notably, the company forecasts a 22.9% chance of a dividend cut across regions and industries, and said the U.S. “remains the safest region for dividends,” with a 6.2% chance of a dividend cut. Most importantly, most industries in the United States appear to be “relatively safe.” Additionally, Japan is considered the “top region” for dividend growth, with an expected growth rate of 9.9%. In contrast, dividend growth prospects for the Pacific region (excluding Japan) and Europe are negative. Here are some names on UBS’s global list of quality dividend stocks. ExxonMobil is on the list, with a dividend yield of 3.7%. The energy giant returned $9.8 billion to shareholders in the third quarter and raised its fourth-quarter dividend to 99 cents per share. Most analysts on Wall Street are also bullish on the name. Of 29 analysts, 17 have a strong buy or buy rating and 11 have a hold rating, according to LSEG. Its average price target is nearly $130, implying about 21% upside from Thursday’s closing price. On this occasion, ExxonMobil officially joined the race to power artificial intelligence data centers. Last month, the company announced plans to build a natural gas plant to power the data center. Although the stock underperformed the market last year, it still posted some gains. Shares are up nearly 5% in the past 12 months. McDonald’s, whose share price has fallen by about 1% in the past 12 months, has topped the charts with a dividend yield of 2.5%. Back in September, the fast-food chain increased its quarterly dividend by 6% to $1.77 per share, which was paid on December 16. This marks the company’s 48th consecutive year of dividend increases. Shares of McDonald’s rose about 1% on Thursday after Arcos Dorados renewed its 20-year master franchise agreement with McDonald’s. After the news was announced, Arcos Dorados’ share price rose by about 3% in the previous trading day. Like ExxonMobil, most analysts are bullish on McDonald’s prospects in the coming months. To be sure, 25 out of 40 analysts have a Strong Buy or Buy rating, while the remaining 15 have a Hold rating. Its average target is around $325, reflecting future upside potential of more than 11%. Meanwhile, Johnson & Johnson’s dividend yield is 3.4%. Earlier this week, the company announced a first-quarter dividend of $1.24 per share. The company first announced a dividend increase to that amount last April, a 4.2% increase from the previous $1.19 per share. The company’s shares have underperformed over the past year, falling more than 10% in the past 12 months.
UBS says cuts to high-dividend-paying quality stocks unlikely in 2025 | Real Time Headlines
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