Share this article

print logo

Dividend-paying stocks attractive amid the turbulence

Dividend-based equity portfolios tend to perform better than others regardless of the economic environment, and are attractive amid the recent turbulence, Royal Bank of Canada's Myles Zyblock said in a note last week.

Using dividend-paying stocks to raise portfolios' income exposure could provide insulation during market volatility, Zyblock wrote in the note. He recommended 15 stocks that recently raised their dividends and are rated 'outperform' by RBC fundamental analysts, including Amgen Inc., the world's largest biotechnology company, and Intel Corp., the world's biggest computer-chip maker.

U.S. stocks posted unprecedented swings in recent weeks as investors weighed mixed signs about the economy against the first downgrade of America's top credit rating by S&P and the European crisis.

"We find dividend-based portfolios tend to outperform through time and across various macro environments," said Zyblock, who is based in Toronto and is RBC's chief institutional strategist. "A strategy that offers a high return per unit of risk is something we can buy into, especially in today's volatile market."

Stocks recommended by Zyblock, with ticker symbols in parentheses:

Amgen Inc. (AMGN)

CA Technologies. (CA)

CenterPoint Energy (CNP)

Darden Restaurants (DRI)

Family Dollar Stores (FDO)

General Mills (GIS)

Intel Corp. (INTC)

International Flavors & Fragrances (IFF)

JM Smucker Co. (SJM)

Kimberly-Clark Corp. (KMB)

Marsh & McLennan Cos. (MMC)

Norfolk Southern Corp. (NSC).

Omnicom Group (OMC)

TJX Cos. (TJX)

Xcel Energy (XEL)