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Finding stocks with high, yet stable dividends is a tall order considering this volatile market and likely deep economic recession.
Morgan Stanley expects stock dividends to fall 19% in the second quarter in 2020 and 11% in the third quarter of 2020. However, the Wall Street firm said a handful of companies with high yields have a low chance of abandoning or lowering their dividend.
The fast-spreading coronavirus has caused unprecedented financial and societal disruption in the U.S. The economy is essentially shutdown. Morgan Stanley said the drop in economic activity will hurt corporate cash flows, potentially creating liquidity issues and pressuring capital return plans.
Morgan Stanley screened for companies that have a dividend yield above 4%, but yet the payouts appear to be safe based on their quantitative analysis of the companies' cash flows. The firm has an overweight rating on all of the listed stocks.
Here's a look at Morgan Stanley's list.