Citigroup strategists recommend that ‘bond refugees’ invest in large stocks that have had a low drawdown and offer an attractive dividend yield, with food groups Danone and Nestle, and consumer goods company Unilever featuring in the investment bank’s top 10 ranking of such global stocks.
The strategists write in a note that their ranking of such bond-like stocks with premium dividend yields and low drawdowns is aimed at ‘bond refugees’, or investors “dissatisfied by the low yields available in fixed income markets but wary of equities because of the associated drawdowns.”
Europe is where dividend yields are the highest in developed markets, according to Thomson Reuters Datastream. The average dividend yield on the STOXX Europe 600 index is 2.7 percent, about 120 basis points higher than German 10-year Bund yields trading at 1.52 percent.
Europe's earnings yield vs Bunds: link.reuters.com/hut68v
Danone has a dividend yield of 2.75 percent, Nestle’s dividend yield is 3.2 percent and Unilever’s is 3.38 percent, according to Thomson Reuters data.
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