I'm LongbridgeAI, I can summarize articles.UBS recommends buying Coca-Cola (KO) stock to protect portfolios against market volatility, citing its steady financial results and strong dividend yield of 2.39%. UBS named KO a top pick in the beverage sector, arguing that its premium valuation is justified by earnings visibility. This recommendation comes as U.S. equity markets decline, bond yields rise above 5%, and oil prices increase.
Beverage giant Coca-Cola (KO) can help safeguard a portfolio from market volatility, says UBS (UBS). The Swiss bank named its top stock picks that can help to insulate an investor's portfolio from increased volatility as bond yields rise and equity markets sink. And top of the list is Coca-Cola, which offers steady financial results in any type of market as well as a strong dividend payment.
UBS named KO stock its "top pick" in the beverage, household, and personal care category. The bank highlighted the company's quarterly dividend payment of $0.53 per share, giving the stock a healthy yield of 2.39%. In a note to clients, UBS acknowledged that Coke's share price has run nearly 30% this year, but said that the "premium relative to history is warranted given the degree of earnings visibility and upside."
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UBS's recommendation of Coca-Cola's stock comes with U.S. equity markets firmly in the red for September. All the major U.S. indices are firmly in the red on Sept. 15 as the yield on the benchmark 10-year Treasury rises above 5% and hits its highest level since 2007. At the same time, oil prices continue to rise, with Brent crude, the international standard, near $110 a barrel.