Steady your portfolio with these resilient low volatility stocks, UBS says

UBS suggests adding low‑volatility, resilient stocks to investors’ portfolios to smooth performance after a strong first half of 2026, when the S&P 500 rose 9.6% and posted a 15% gain in Q2—the best quarterly performance since 2020. Despite volatility from events such as the early Iran conflict and a rotation out of technology stocks, several companies with stable fundamentals and limited price swings are highlighted. UBS notes that as capital has concentrated in AI‑driven segments, low‑volatility stocks have lagged, with valuations reflecting this underperformance. The selected stocks, which include many from industrials and healthcare and several that pay dividends, are screened for quality and attractive valuations. Examples include Yum Brands, whose restaurant business has generated cash‑flow returns on investment above 30% for most of the past decade; the stock is up more than 10% in 2026, reaching a 52‑week high, offering a dividend yield of 1.79%, and receiving buy ratings from the majority of analysts. Lockheed Martin, the maker of the F‑35 fighter jet, also appears on the list, up about 10% in 2026 with a 2.59% dividend yield; UBS expects a positive reaction to its upcoming earnings, citing a large Terminal High Altitude Area Defense contract and strong bookings in its Missiles and Fire Control division. Although the stock is rated a hold by most analysts, consensus price targets imply roughly 16% upside. McDonald’s, despite a roughly 8% decline in 2026, maintains a 2.64% dividend yield and is rated a buy, with analysts expecting about 17% upside as the brand leverages global growth and defensive characteristics. Other names on the UBS list include Eli Lilly, Stryker, Charles Schwab, Medtronic, and Keurig Dr Pepper.

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