Protect your portfolio from volatility with these high-dividend stocks, Jefferies says
Investors seeking shelter from the rocky market may want to consider stocks with high yields and low volatility, according to Jefferies. The three major indexes are higher for the year, but the ride has been anything but smooth. Concerns about the Iran war, oil prices and inflation have weighed on investors, as well as the high valuations of artificial intelligence stocks. The market fell on Monday , including semiconductor stocks. “Volatility in the AI thematic has spiked amid concerns about hyperscaler ROI [return on investment] vs potential overcapacity, elevated expectations, large fund-raisings, and extreme positioning with large retail presence,” analyst Desh Peramunetilleke said in a note last week. “While we still see the theme as a long-term winner, the above reasons could drive an unwinding of the AI-led momentum,” he added. Instead, one of the areas of the market Peramunetilleke likes this summer is low volatility stocks with high dividends or free-cash flow yields. The names can provide a hedge against a sharp correction if concerns over AI deepen, he said. To find those stocks, Peramunetilleke screened for U.S. companies with a market cap over $10 billion and in the bottom quintile of volatility. They also had a 12-month forward dividend yield over 3% or a free cash flow yield more than 3% in the last 12 months. The names also had positive or flat 2026 estimated earnings-per-share revision over the last three months. Here are some of the names that made the list. Investors looking for a classic defensive stock can turn to Procter & Gamble , which has a 12-month forward dividend yield of 3%. The consumer packaged goods company is set to release its fiscal fourth-quarter earnings on July 29. When it last reported in April , its adjusted earnings per share and revenue topped expectations as product volumes grew for the first time in a year. The stock is well-liked by analysts, who give it an average rating of overweight, according to FactSet. It has 10% upside to the average price target. Procter & Gamble has lagged the overall market, gaining nearly 3% year to date. Meanwhile, Pfizer is in the red for the year, down roughly 2%. The pharmaceutical giant has a 6.9% 12-month forward dividend yield, Peramunetilleke said. Pfizer is expected to announce its latest fiscal results on Aug. 4. In May, the company beat Wall Street estimates for both earnings and revenue for its first quarter. PFE YTD mountain Pfizer year to date Last week, the Food and Drug Administration approved the use of its Padcev and Keytruda combination for muscle-invasive bladder cancer without the required considerations over the patient’s eligibility for cisplatin-based chemotherapy. However, in June its experimental lung cancer drug failed to show a statistically signficant improvement when compared to chemotherapy in a late-stage trial. The stock has an average analyst rating of hold and 16% upside to the average price target, per FactSet. Simon Property Group , on the other hand, has an average rating of overweight. It has 2% upside to the average price target, according to FactSet. The mall operator will report second-quarter results on Aug. 10. In May, Simon Property’s funds from operation topped expectations. The company also raised its full-year guidance and quarterly dividend. “Our portfolio delivered strong operating performance, supported by continued leasing momentum, retailer sales and traffic increases, disciplined capital allocation, and growth in cash flow,” CEO Eli Simon said in the earnings release. SPG YTD mountain Simon Property Group year to date The real estate investment trust has a 12-month forward dividend yield of 4.30% and is up 18% in 2026. Lastly, KeyCorp has a 3.8% 12-month forward dividend yield and has moved about 12% higher year to date. The financial services company is set to post its second-quarter earnings on July 21. In April, its first-quarter EPS and revenue beat estimates. Analysts are bullish on the name, giving it an average rating of overweight. The stock has 7.5% upside to the average price target, per FactSet.
