By Ian Salisbury

Investors can still find stocks yielding a safe 5% even though companies' efforts to hoard cash may leave them with less money for dividends and buybacks.

In a volatile, uncertain economic climate, corporate managers like to know they have enough cash to ride out any potential trouble, just like individual investors. The current climate, with downbeat consumer sentiment and President Donald Trump's aggressive trade policies, has plenty of companies pulling up the drawbridge, according to a report Wednesday by Goldman Sachs.

Given all the uncertainty, the bank said it now thinks S&P 500 companies will increase their spending from cash by just 5% in 2025, down from a previous estimate of 11%. The biggest areas for cutbacks are likely to be buybacks and mergers and acquisitions, according to the note. But Goldman also said it also now expects cash spending on dividends to grow just 5%, down from 6% previously.

Fortunately, there are still plenty of stocks with attractive yields that investors should be able to count on. To pin down some names, we asked FactSet to build us a screen highlighting some factors dividend investors love.

We began with members of the S&P 500 with annual dividend yields of at least 5%, based on Wall Street forecasts of payouts for the next quarter. Yields that high imply a stock is out of favor -- the average yield in the S&P 500 is only about 1.3% -- so we also sought to exclude those that might have to cut their dividends. To do that, we screened for payouts that amounted to no more than 75% of free cash flow, and for companies that Wall Street expects to grow earnings at least 5% in 2025.

Bristol Myers Squibb, the largest company on our list by market capitalization, posted better-than-expected earnings on Thursday. While shares fell slightly on disappointing news about its schizophrenia medicine Cobenfy, CFO David Elkins told analysts the company is on track to pay down $10 billion in debt and remains committed to its dividend, which it has paid for 93 straight years.

Stanley Black & Decker is another longtime payer that passed the screen. The power-tool maker has seen its stock price languish recently because retailers have cut orders to work through backlogs of inventory left over following the renovation boom sparked by Covid-19. But Wall Street expects a return to sales growth in the second half of 2025, and a solid 4% increase in 2026.

On the company's March conference call, CEO Donald Allan Jr. said Stanley Black & Decker's divided yield was one thing he hoped would make the stock "very attractive" to investors.

As with Bristol Myers, history is on Stanley Black & Decker's side. Stanley Black & Decker is one of the stocks owned by the ProShares S&P 500 Dividend Aristocrats, an exchange-traded fund that targets only companies that have paid, and increased, their dividends for 25 straight years.

Write to Ian Salisbury at ian.salisbury@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 24, 2025 15:50 ET (19:50 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.