By Ian Salisbury

The stock market is looking a lot more volatile -- stocks that boast healthy profits and dividends are one way to ride out the storm.

The war in Iran has injected a huge amount of uncertainty in the markets. As a result, the CBOE Volatility Index, often referred to as Wall Street's "fear gauge," has jumped to more than 25 from less than 18 in late February. Weak economic data, like the latest jobs report, haven't helped.

To find stocks that can thrive in this kind of environment, BofA Global Research's small- and mid-cap $(SMID)$ team screened for stocks with "value, quality and cash return," characteristics -- in other words, stocks with low price-to-earnings ratios, steady profits, and a track record of dividends and buy backs.

BofA's full list includes around 30 names. To narrow the list further, Barron's decided to highlight the five that are rated "Buy" by BofA's stock analysts and also boast above-market dividend yields.

The highest yielding stock on the list is PagSeguro Digital, a Brazilian financial services company, with a dividend yield of 4.2%. Not unlike Stripe in the U.S., PagSeguro offers technology that lets customers make credit card payments to small businesses. It also offers banking products like credit and debit cards.

While the industry is competitive, PagSeguro is growing fast. The company's 2026 outlook, issued earlier this month, calls for expanding its credit portfolio by 25% to 35% this year. It projected annual earnings-share-growth of 16% between 2025 and 2029.

PagSeguro shares trade at just six times projected 2026 earnings, according to FactSet. Many Wall Street analysts think it's a bargain. The average target price among the 14 analysts that follow the stock is $12.80, representing 33% upside from today's price of $9.59.

The four other stocks that meet the criteria are First Bancorp, with a 3.9% dividend yield; insurer Essent Group, yielding 2.4%; mortgage insurance company Enact Holdings, yielding 2.1%; and credit card company Bread Financial Holdings, yielding 1.3%.

Wall Street analysts expect profits for Puerto Rico-based First Bancorp to grow just 0.5% in 2026, although growth should accelerate to 9% for 2027. Shares trade at nine times forward earnings.

For Essent, forecasts call for profit growth of 4% in 2026 and 7% in 2027. It trades at eight times forward earnings.

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

March 19, 2026 14:24 ET (18:24 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.