U.S. stocks fell into bear market territory past thirty day period — and the wild swings because have built it hard to forecast the place the sector is heading up coming. The S & P 500 logged its worst efficiency in 50 several years during the initial half of this calendar year, as it tumbled almost 20%, and the Nasdaq is down approximately 30% from its significant this year – effectively into bear market territory. Stocks staged a comeback on Tuesday following the July 4 getaway, but worries about a potential economic downturn go on to plague markets. Presented this setting, just one tactic that has been flagged by a amount of strategists is getting into so-called dividend growers — providers with a robust observe record of growing the sum of money they return to shareholders. ‘Dividend aristocrats’ Citi would not be expecting company profits to make gains of “any magnitude” this 12 months and following, in particular supplied their surge in 2021. “This prospects us to devote in the most durable demand from customers industries, and particularly in the shares of companies with the most steady keep track of history of dividend progress,” the financial institution stated, terming them “superior top quality dividend growers.” Browse far more Wall Road financial institutions identify their major world stocks for the next 50 % — and give three over 70% upside Want to know exactly where to invest for the upcoming 10 years? Here’s what the professionals propose Economic downturn playbook: In this article are some of Wall street’s leading stock picks for a downturn This kind of companies have to have to “above-gain” their dividends to sustain increased payouts, it mentioned. “This factors us to so-named ‘dividend aristocrats,’ corporations with the strongest monitor record of developing dividends. These shares have solidly outperformed this 12 months presently.” Combining these dividend expansion shares with bonds, as nicely as tax-effective investing approaches for crushed-down shares and bonds “delivers a decreased-threat method for today’s uncertainties,” explained Citi. Stock picks Wolfe Study — which says its foundation scenario in the intermediate term is bearish — screened for defensive dividend stocks with yields of much more than 3%, lower personal debt, and lower payout ratios. A payout ratio refers to the proportion of earnings a enterprise pays its shareholders in the sort of dividends a very low ratio suggests the business is re-investing most of its earnings into its functions. Wolfe Research’s display screen of U.S. stocks turned up names across sectors including vitality, tech, healthcare and shopper. Stocks these kinds of as Pfizer , Coca-Cola , Exxon Mobil , Cisco and IBM made the reduce. Barclays also ran a display of over weight-rated U.S. shares with a a few-year common dividend produce of more than 3%, and yields which are envisioned to develop or keep on being stable through 2023. A raft of consumer, energy, fiscal and tech stocks turned up, which includes Energizer Holdings , Fidelity Nationwide Fiscal and Cisco . Sustainable yield Nicholas Ferres, main financial investment officer at Vantage Level Asset Administration, stressed the great importance of a sustainable dividend produce. “So when we screen for companies with decent dividend yields, we also search at stability sheet power, and we look at no cost money circulation,” he advised “Squawk Box Asia” on Monday. Free dollars flow is money created by a business enterprise following accounting for running and money expenditure. The asset manager screened for international stocks with 5.4% dividend produce, price tag-to-earnings ratio underneath 10x, and small personal debt ratios. The shares that turned up involved insurance company AIA , Nationwide Australia Financial institution , Taiwan tech organization Advantech , and Chinese Covid vaccine maker Sinopharm .