UBS Wealth Management told investors dividends “still, and always, matter” and shared a list of dividend stocks the firm recommends for its clients.
“Dividend paying stocks should benefit from demographics as aging Baby Boomers seek income growth in a low interest rate environment,” investment strategist Jeremy Zirin wrote in the report Monday. “Strong balance sheets, solid free cash flow generation, and low dividend payout ratios support corporations’ ability to fund continued dividend growth.”
The strategist cited how in the past 100 years, dividends equated to about 50 percent of the total return of the stock market. He expects dividends to be a “higher component of equity market total return after stocks have largely erased significant undervaluation over the past eight years.”
UBS recommended its “Dividend Ruler” stock strategy, which consists of companies with strong track records of dividend growth and a positive fundamental outlook according to the firm’s research team.
The strategy cumulatively returned 229 percent since inception in 2003 versus the S&P 500’s 191 percent performance.
Here is a selection of five stocks that made the firm’s “Dividend Ruler” recommended list.