As global markets stay unpredictable, Morgan Stanley urges investors to focus on dividend stocks. The MSCI Asia Pacific ex-Japan High Dividend Index has slightly lagged behind the broader index this quarter, but analysts see promising opportunities ahead. They recommend that investors adopt a balanced strategy, especially with uncertainty surrounding the upcoming U.S. elections and a trend toward global monetary easing, which emphasizes dividend yield.
High interest in corporate reform and shareholder returns in Asia and emerging markets could benefit dividend stocks. Morgan Stanley compiled a “conviction list” of dividend stocks that are expected to perform well over the next year, including firms rated overweight or equal-weight with low risk of dividend cuts and market caps over $2 billion. Here are some highlighted stocks:
Top Dividend Stocks
- Hon Hai Precision: This major electronics manufacturer is Morgan Stanley’s top pick. Analysts see it as an undervalued player in the AI market and expect significant growth in AI server sales and steady consumer demand this year. Shares are up nearly 100% year-to-date, and the firm projects a target price of 270 New Taiwan dollars (approximately $8.42), suggesting a 30% upside.
- PetroChina: This Chinese oil giant is noted for its sensitivity to oil prices and has a target price of 8.76 Hong Kong dollars (about $1.13), indicating a potential 43% increase. Analysts highlight its natural gas resources, crucial for China’s carbon neutrality goals, as an area with significant unseen potential.
For further details on these stocks and their performance, Morgan Stanley’s analysis provides insights valuable for investors navigating today’s market.
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