UBS has unveiled a curated Global High-Quality Dividend Stock List identifying six companies it judges to be high-quality dividend payers with a relatively low probability of trimming distributions. The selections are Omnicom Group (NYSE: OMC), Dominos Pizza (NYSE: DPZ), Exxon Mobil (NYSE: XOM), UnitedHealth Group (NYSE: UNH), Digital Realty Trust (NYSE: DLR), and DTE Energy (NYSE: DTE).
The bank used quantitative screening models to isolate companies that appear to stand out on quality measures versus peers and that pay dividends with a low modeled probability of cuts. UBS then subjected the candidates to additional review by its sector analysts to ensure the cross-sector and cross-region representation reflected both model output and analyst judgment.
Model outputs and regional-sector distinctions
- The combined models estimate a 17.8% probability of a dividend cut when assessed across regions and sectors.
- Regionally, the United States exhibits the lowest modeled risk with a 6.2% probability of a dividend cut.
- At the sector level, Energy shows the highest modeled risk of cuts at 26.3%.
- Emerging markets register the highest modeled regional risk at 23.0%.
UBS also provides forecasts for dividend growth by region and sector. Japan leads with a forecasted dividend growth rate of 12.8%. By contrast, the Energy sector in Pacific ex Japan is shown with the weakest forecast, at -19.5%.
Recent relative performance
UBS notes that over the past quarter, baskets of high-yielding stocks outperformed those of low-yielding stocks across all regions. The bank highlights that Japan returned 10.6% over that period for high-yield baskets, while the United States saw a 6.9% advance.
The selected names form the basis for the UBS Global Quality Dividend Payers Index, which the firm describes as a liquid, tradable, total return index constructed from this stock list.
Disclosure: UBSs list was produced using quantitative models and supplemented by sector analyst reviews as described above.