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As investors brace themselves for potentially more volatile markets the rest of this year, companies that grow their dividends consistently could be a good place for them to wait it out, according to Credit Suisse. These so called “dividend aristocrats” outperform when purchasing managers indexes fall, the firm said in a note to investors Friday. And they’ve outperformed by 15% in the past 20 years in the U.S., and 90% in Europe. Plus, they’re cheap. “With the bond-to-equity correlation turning positive, asset allocators are likely to seek bond-like equities, and flows into dividend funds have accelerated,” said Andrew Garthwaite, Credit Suisse’s head of global equity strategy. “High-yield dividend names, until a year ago, performed very poorly and low yield outperformed. We have recently seen a reversal, with high yield outperforming by 8% this year.” Dividends have provided 83% of total returns since 1900. Here are eight dividend-growing companies Credit Suisse highlights: Coca-Cola ‘s dividend yield is on the lower end of the list at 2.6%, though it’s one of Credit Suisse’s outperform-rated names. On the other end of the spectrum, Walgreens Boots Alliance has the largest yield on the list at 4.9%. Credit Suisse gives Walgreens a neutral rating. 3M’s current yield is about 4.2% and also has a neutral rating. Chevron and Exxon Mobil are the two energy names on the list and both have outperform ratings. They’re in the middle of the group with dividend yields at 3.7% and 3.5%, respectively. They’re followed by Cardinal Health , Clorox and Stanley Black & Decker – all of which have dividend yields between 3.2% and 3.4%. Credit Suisse also highlighted some stocks investors should avoid. These names all have neutral or underperform ratings from the bank. They also have high debt (net debt-to-EBITDA ratio greater than 3.5) and low free cash flows. Duke Energy, McCormick, Wendy’s and Yum Brands all met these criteria.
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