If you think that market volatility is going to persist in the near future, you may be very interested in this list.
We ran a screen on dividend stocks paying dividend yields above 2% for those with strongly positive correlations to the VIX, the volatility index (or “fear gauge”), over the last three months.
The VIX index measures the implied volatility of S&P 500 index options, and it increases when market uncertainty takes over. If a stock has positive historical correlation with the VIX, it has tended to perform well when volatility and uncertainty spike. The market may be treating these stocks as “safe havens” during market crises.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Click to enlarge
Do you think market volatility will persist? Use this list as a starting point for your own analysis.
List sorted by correlation to VIX.
1. China Mobile Limited (CHL): Provides mobile telecommunications and related services primarily in the Mainland China. Market cap of $201.50B. Dividend yield at 4.06%, payout ratio at 43.06%. Correlation to the VIX index at 0.54. The stock has had a good month, gaining 12.99%.
2. McDonald's Corp. (MCD): Operates as a food service retailer worldwide. Market cap of $87.73B. Dividend yield at 2.87%, payout ratio at 47.51%. Correlation to the VIX index at 0.55. It has been a rough couple of days for the stock, losing 5.6% over the last week.
3. Renaissance Learning Inc. (RLRN): Provides computer-based assessment and periodic progress monitoring technology for pre-kindergarten through senior high schools and districts in the United States and internationally. Market cap of $453.91M. Dividend yield at 2.07%, payout ratio at 38.10%. Correlation to the VIX index at 0.58. The stock has had a good month, gaining 31.02%.
*Price data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.