With a bumpy start to 2025, quality stocks that have reliable dividends could become more appealing. The first trading day of the new year marked a volatile session for stocks, with all three major averages finishing yet another session in the red on Thursday after starting off the day with gains. The S & P 500 and Nasdaq Composite have now declined for five consecutive sessions – their longest losing streaks since April – while the Dow Jones Industrial Average has dropped for its fourth session in a row. Against this market backdrop, UBS screened for stocks that look high quality relative to their peers and are unlikely to cut the dividends they currently pay. Notably, the firm forecasts a 22.9% probability of a dividend cut across regions and sectors, saying that the U.S. “continues to be the safest region for dividends” with the probability of a dividend cut at 6.2%. On top of that, most U.S. sectors look “relatively safe.” Additionally, Japan is considered the “most preferred region” for dividend growth, having a forecast growth rate of 9.9%. By contrast, dividend growth prospects in the Pacific region, excluding Japan, as well as Europe are negative. Below are a few names on UBS’ global high-quality dividend stock list. Exxon Mobil made the screen, having a dividend yield of 3.7%. The energy giant returned $9.8 billion to shareholders in the third quarter and increased its dividend for the fourth quarter to 99 cents per share. A majority of analysts on Wall Street are also bullish on the name. Among the 29 analysts covering it, 17 have a strong buy or buy rating, while 11 have a hold rating, according to LSEG data. Its average price target of nearly $130 implies about 21% upside from Thursday’s close. This comes as Exxon has officially entered the race to power data centers for artificial intelligence. Last month, the company announced that it’s planning to build a natural gas plant to power a data center . While the stock underperformed the broader market last year, it still saw some gains. In the past 12 months, shares have risen almost 5%. McDonald’s , which has conversely fallen about 1% in the past 12 months, made the screen with a 2.5% dividend yield. Back in September, the fast-food chain increased its quarterly dividend by 6% to $1.77 per share , which was payable on Dec. 16 last year. That signified 48 consecutive years of the company increasing its dividend. On Thursday, McDonald’s shares advanced about 1% on the heels of Arcos Dorados renewing its 20-year master franchise agreement with the company. Arcos Dorados shares gained around 3% in the previous session following the announcement. Like Exxon, most analysts are bullish on McDonald’s in the months ahead. To be sure, 25 out of the 40 analysts covering it have a strong buy or buy rating, while the remaining 15 have a hold rating. Its average target of around $325 reflects more than 11% upside potential ahead. Meanwhile, Johnson & Johnson has a 3.4% dividend yield. Earlier this week, the company declared a dividend of $1.24 per share for the first quarter of this year. It first announced that it was increasing its dividend to that amount back in April last year, signifying a 4.2% rise from its previous amount of $1.19 per share. Shares have had a rough run over the past year, falling more than 10% in the past 12 months.
High quality stocks that pay a hefty dividend they are unlikely to cut in 2025, according to UBS