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LivestreamMenuThe stock market managed to post a solid first half of 2026 – turbulence notwithstanding – but investors may want to add a few low volatility names to anchor their portfolios, according to UBS. The S & P 500 popped 9.6% in the first half of the year and notched a nearly 15% advance in the second quarter alone – its strongest quarterly performance since 2020. At times, investors had to white-knuckle their way through rocky episodes, including the start of the Iran war in late February and investors’ recent rotation out of tech stocks. To help temper some of the swings investors may see in their portfolios, UBS has highlighted several stocks with low volatility and “resilient” fundamentals. “As capital has concentrated in AI-driven pockets of the market, low volatility stocks have lagged, with the underperformance increasingly reflected in valuations,” wrote Jonathan Carson, UBS HOLT sector specialist, in a Monday report. HOLT refers to the firm’s proprietary framework for comparing and determining the valuation of companies around the world. “This week’s screen identifies high quality companies with limited volatility that are screening at attractive valuations relative to history,” he added. Industrials and the healthcare sector account for about half of the companies on the list – and a good number also pay dividends. Here are a few that made the cut. Yum Brands The parent company of Taco Bell and KFC emerged on UBS’s list. The bank said it’s a “stable high-quality restaurant business that has generated [cash flow return on investment, or CFROI] above 30% for most of the past decade.” UBS said that Yum Brands ‘ CFROI is expected to reach its highest level ever by 2027 as the company divests its Pizza Hut segment . Yum Brands is expected to refocus on topline growth through an international expansion of Taco Bell and the rollout of a KFC loyalty program, UBS added. Shares are up more than 10% in 2026, touching a fresh 52-week high on Tuesday, and offer a current dividend yield of 1.79%. Thirteen of 28 analysts deem the stock a buy or strong buy, according to LSEG, with consensus price targets calling for about 3% upside over the next 12 months. Lockheed Martin The manufacturer of the F-35 Lightning II stealth fighter jet also turned up on UBS’ list. Shares are up about 10% in 2026, and pay a current dividend yield of 2.59%. Lockheed Martin is expected to issue second-quarter earnings later this month. Though UBS is neutral on the stock, the bank expects shares to see a positive reaction after the results. “We expect a beat and raise and positive reaction against a low bar,” the bank said in a June 29 report. A seven-year $35 billion award for Lockheed’s Terminal High Altitude Area Defense interceptors could present upside to 2026 numbers, UBS added. The firm also anticipates upside to Lockheed’s growth outlook for its Missiles and Fire Control business. “We see strong bookings in the quarter, with the pace accelerating into year-end,” UBS said. Wall Street is largely neutral on the defense prime contractor, with 14 out of 24 analysts rating it a “hold.” But consensus price targets suggest almost 16% upside, according to LSEG. McDonald’s The burger chain also made the grade, even as the stock has seen better days. McDonald’s shares are down almost 8% in 2026, but the stock pays a current dividend yield of 2.64%. UBS rates the stock a buy, noting in May that while McDonald’s faces macroeconomic pressures and “potentially slower trends,” the brand is “well positioned globally.” “We believe risk/reward for MCD shares is attractive despite near-term pressures, given catalysts with potential to drive market share gains & strengthen U.S. sales growth, and defensive characteristics that should provide earnings stability in a still volatile environment,” UBS said. Wall Street is largely bullish on McDonald’s, with 20 out of 36 analysts rating it a buy or strong buy. Consensus price targets imply roughly 17% upside from current levels, per LSEG. Other names on UBS’ list include Eli Lilly & Co. , Stryker , Charles Schwab , Medtronic and Keurig Dr Pepper .Read More
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