Bank of America Recommends High-Yield Stocks to Navigate Market Volatility
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 16 2026
0mins
Source: CNBC
- Market Volatility Strategy: Bank of America highlights that in the face of market volatility and stagflation risks, investors should focus on sustainable high-yield stocks to protect their portfolios, especially as the S&P 500 reaches an all-time high.
- Sustainable Dividend Yields: With the S&P 500's dividend yield at only 1.1%, Bank of America advises investors to seek stocks with above-market but not overstretched dividend yields to achieve better returns, particularly in the current interest rate environment.
- PepsiCo's Strong Performance: PepsiCo reported first-quarter adjusted earnings of $1.61 per share, exceeding market expectations, and its North American food business saw volume growth for the first time in two years, demonstrating the company's adaptability following price adjustments.
- Citizens Financial's Positive Outlook: Citizens Financial reported first-quarter earnings of $1.13 per share, surpassing expectations, and forecasts net interest income growth of 3% to 4%, indicating resilience and growth potential for the regional bank in the current economic climate.
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Analyst Views on PEP
Wall Street analysts forecast PEP stock price to rise
12 Analyst Rating
6 Buy
6 Hold
0 Sell
Moderate Buy
Current: 146.290
Low
144.00
Averages
161.90
High
172.00
Current: 146.290
Low
144.00
Averages
161.90
High
172.00
About PEP
PepsiCo, Inc. is a global beverage and convenient food company. The Company’s segments include PepsiCo Foods North America (PFNA), PepsiCo Beverages North America (PBNA), International Beverages Franchise (IB Franchise), Europe, Middle East and Africa (EMEA), Latin America Foods (LatAm Foods), and Asia Pacific Foods. PFNA segment includes all of its convenient food businesses in the United States and Canada. PBNA segment includes all of its beverage businesses in the United States and Canada. IB Franchise segment includes its international franchise beverage businesses, as well as its SodaStream business. EMEA segment includes its convenient food businesses and beverage businesses with Company-owned bottlers in Europe, the Middle East and Africa. LatAm Foods segment includes all of its convenient food businesses in Latin America. Asia Pacific Foods segment consists of its convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Forecast Analysis: Tesla's full self-driving, robotaxi, Semi truck, and Optimus robot are projected to contribute only 2% of total revenue by 2026, but their combined revenue growth will significantly increase in 2027 and 2028, accounting for 46% of overall company revenue growth.
- Full Self-Driving Transition: Tesla's full self-driving software has shifted to a subscription model with excellent uptake, and as more global approvals, particularly in Europe, are anticipated, revenue growth is expected to accelerate in 2026, despite a slow initial production ramp-up.
- Semi Truck Production: The Semi truck has been successfully deployed with clients like PepsiCo and has entered commercial production, although the initial production ramp-up will be very slow, laying the groundwork for future market expansion.
- Key Catalyst for Robotaxi: The rollout of Tesla's robotaxi relies on the validation and release of the v15 full self-driving software, expected by year-end; while the number of unsupervised robotaxis is increasing, widespread deployment still hinges on the successful launch of this software.
See More
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- Growth Expectations: Wall Street forecasts Tesla's total revenue to reach $103.406 billion in 2026, with the four new initiatives (FSD, robotaxi, Semi truck, and Optimus) contributing only 2% of revenue, yet expected to account for 46% of growth by 2028, indicating long-term potential.
- Product Progress: The Semi truck has successfully entered production and partnered with PepsiCo, and while initial production ramp-up is slow, this progress lays the groundwork for future market expansion, enhancing Tesla's competitiveness in the commercial EV sector.
- FSD Transition: Tesla's full self-driving software has shifted to a subscription model with good user uptake, and global approvals expected in 2026 will further drive revenue growth, although execution risks remain in the short term.
- Robotaxi Outlook: While the number of Tesla's robotaxis is increasing, the key catalyst for widespread deployment remains the validation and release of the FSD software, anticipated by the end of 2026, which will be crucial for achieving broader market acceptance.
See More
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- Dividend Kings Performance: PepsiCo has increased its dividends for 54 consecutive years, currently yielding 3.9%, and its diverse portfolio of beverages and snacks is expected to drive revenue growth, especially as the global snack market is projected to rise from $719 billion in 2024 to $922 billion by 2030.
- Utility Stability: Black Hills, a utility stock, has raised its dividends for 56 years with a current yield of 3.7%, and plans to merge with NorthWestern Energy Group, which would expand its customer base to over 2 million, further solidifying its market position.
- Strong Sales Performance: Colgate-Palmolive reported $5.3 billion in net sales for Q1 2026, marking its fourth consecutive quarter of record sales, and despite facing rising packaging and material costs, its 63-year history of dividend increases demonstrates its resilience to uncertainty.
- Market Defensive Strategies: Amid rising inflation and interest rate uncertainty, investors are leaning towards companies with stable dividends to protect their portfolios, making PepsiCo, Black Hills, and Colgate-Palmolive ideal choices due to their strong dividend records, providing a safety margin during market fluctuations.
See More
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- Importance of Defensive Investments: Amid current market rally concerns, investors are advised to include defensive assets in their portfolios to mitigate potential downturn risks, ensuring stable returns during economic fluctuations.
- Performance of Dividend Kings: Companies known as 'Dividend Kings', such as PepsiCo (PEP), Black Hills (BKH), and Colgate-Palmolive (CL), have consistently increased dividends for over 50 years, demonstrating strong business resilience and stable cash flows, making them suitable holdings during economic uncertainty.
- PepsiCo's Market Advantage: With a dividend yield of 3.9%, higher than Coca-Cola's 2.6%, PepsiCo's diverse product portfolio, including snacks and beverages, is expected to drive revenue growth in the coming years, particularly as consumers continue to opt for affordable luxuries during economic slowdowns.
- Black Hills' Merger Prospects: Black Hills has increased its dividend for 56 consecutive years, currently yielding 3.7%, and plans to merge with NorthWestern Energy Group, which, if approved, will serve over 2 million customers, further strengthening its market position and revenue stability.
See More
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- PepsiCo's Growth: PepsiCo (PEP) announced a 4% increase in its quarterly dividend to $1.48 this month, having raised dividends for 54 consecutive years, with a current yield of 4%, nearly four times that of the S&P 500, reflecting its strong profitability and market competitiveness.
- Procter & Gamble's Long-Term Commitment: Procter & Gamble (PG) has paid dividends since 1890 and has raised them for 70 straight years, with the latest quarterly payout increased by 3% to $1.0885, yielding 3.1%, supported by over $11 billion in free cash flow that easily covers $7.6 billion in dividends.
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See More
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- Coca-Cola Dividend Increase: Coca-Cola raised its quarterly dividend from $0.51 to $0.53 this year, marking 64 consecutive years of increases, which underscores its strong profitability and commitment to shareholders, with a current yield of 2.6%, significantly higher than the S&P 500's 1.1%.
- PepsiCo's Stable Returns: PepsiCo announced a 4% increase in its quarterly dividend to $1.48 this month, having raised dividends for 54 consecutive years, with a current yield of 4%, nearly four times that of the S&P 500, reflecting its robust market position and profitability.
- Procter & Gamble's Dividend History: Procter & Gamble has paid dividends since 1890 and has raised them for 70 straight years, with the latest quarterly payout increased by 3% to $1.0885 per share, yielding 3.1%, supported by strong free cash flow that ensures dividend sustainability.
- Attractiveness of Realty Income: Realty Income has increased its dividend 134 times since going public in 1994, recently raising the monthly payout from $0.27 to $0.2705 per share, yielding 5.2%, appealing to income-seeking investors due to its stable cash flow and high dividend policy.
See More
