Intel’s dividend cut shows the need for quality. Here are 20 dividend stocks screened by UBS.

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Intel cut its dividend by 66% after analysts' estimates showed the chip maker was expected to run negative cash flow for the next two full years.

Stocks that pay high dividends can provide comfort during times of market turmoil. It is much easier to be patient if money is rolling in, and a strategy of reinvesting dividends may outperform when the broader market falls.

But the last thing an investor wants to see is a dividend cut, and a surprise dividend cut can be punishing for a stock’s price. At a time when Intel was laying off employees to cut costs, paying $6 billion a year in dividends didn’t appear viable. Some investors anticipate a recession in light of soaring interest rates. According to the UBS strategists, “dividend stocks outperformed the market by 4.5%, with high quality dividend stocks up 7.5% on a relative basis” during recessions in 2001, 2008 and 2020.

 

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