How Growing Your Dividends May Work Better Than Picking High-yielding Stocks

Evercore ISI has identified a group of defensive stocks that it believes are well-positioned to navigate the ongoing trade tensions and tariff disputes. These stocks are seen as resilient in the face of trade wars, which have escalated in recent weeks.

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In an announcement on Sunday, President Donald Trump revealed his latest tariff plan, this time targeting steel and aluminum imports from all countries. He later signed an executive order imposing a 25% tariff on these metals. The move follows a broader pattern of trade restrictions aimed at countries like China, Canada, and Mexico, with increased tariffs on China taking effect immediately, while those on Canada and Mexico have been delayed for a month. In response, China quickly imposed its own tariffs on U.S. goods, further escalating the trade dispute.

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The European Union also weighed in on the matter. European Commission President Ursula von der Leyen condemned the tariffs as unjustified and warned of strong countermeasures against the U.S. These retaliatory actions add to the already growing tensions in global trade, causing concern among financial markets. Investors are particularly worried about the potential impact of these trade conflicts on inflation and the U.S. economy, as well as the negative effect on corporate profits.

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In light of these concerns, Evercore ISI focused its research on identifying stocks that could weather these economic challenges. The firm’s screening criteria included companies in the top 20% for low volatility, strong stock buyback programs, and high efficiency, measured by metrics like asset turnover and equity turnover. These stocks also had to be members of the Russell 3000 index, with a market capitalization of at least $5 billion.

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Among the stocks that met Evercore’s criteria was Apple, a company that has performed well despite the uncertain economic environment. Over the past year, Apple’s shares have risen nearly 21%, though they’ve dipped by 9% in early 2025. Apple is known for its relatively stable performance and robust buyback history, having authorized a record $110 billion in stock repurchases last year, up from $90 billion in 2024.

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This large-scale buyback strategy is part of Apple’s efforts to return value to shareholders and maintain confidence in its stock. Evercore analyst Amit Daryanani also noted that Apple’s potential for growth in emerging markets could help mitigate any sales slowdown in China, which has been a challenge for the company. Additionally, the rising demand for the iPhone SE could serve as a growth catalyst for the company in the near future.

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AbbVie, the pharmaceutical company known for its arthritis and psoriasis treatment Humira, also made the list. AbbVie’s stock has risen 9.3% over the past year, underperforming the broader market but still demonstrating resilience amid the broader economic challenges. The company offers a dividend yield of 3.44%, which can provide stability to investors looking for income in uncertain times.

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Recently, AbbVie received approval from the U.S. Food and Drug Administration for Emblaveo, a drug developed in partnership with Pfizer to treat complicated intra-abdominal infections. This approval is seen as a positive development that could drive future growth for the company.

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Other companies that appeared on Evercore ISI’s list include MetLife, a major player in the insurance industry, and Cencora, a drug wholesale company formerly known as AmerisourceBergen. These companies share the characteristics that Evercore ISI believes make them solid choices for investors seeking stability and growth, even in the face of rising global trade tensions and other economic uncertainties.

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The investment bank’s focus on low-volatility, high-efficiency companies with strong buyback programs reflects a strategy aimed at minimizing risk while still capitalizing on potential growth opportunities. As the trade war intensifies and inflation concerns persist, stocks that demonstrate stability and effective capital management are likely to attract investor attention. The companies identified by Evercore ISI fit this profile and could provide a safer bet for investors looking to ride out the storm.

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In conclusion, Evercore ISI’s research has highlighted a select group of defensive stocks that are well-positioned to navigate the turbulent economic environment caused by trade disputes, inflation, and other market challenges. These stocks, including Apple, AbbVie, MetLife, and Cencora, offer a mix of low volatility, solid buyback strategies, and efficiency metrics that make them attractive to investors seeking stability in uncertain times. As the global trade situation continues to evolve, these companies could provide the resilience needed to weather any economic storms.

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