Buyers are making ready for a dismal 2023 by doubling down on cash-rich firms . “We choose firms producing cash quite than these that want capital to develop. Not solely are charges prone to stay larger than they’ve been in latest previous, however we’re seemingly exiting an period of hyper-accommodative financial coverage,” Financial institution of America mentioned in a Jan. 16 be aware. The upper the free cash movement yield, the higher an organization’s place to satisfy its debt obligations. An organization with a excessive free cash movement can be in a position to entry cash extra rapidly within the occasion of an emergency or alternative. “Corporations that pay dividends, firms with nice cash movement, high quality steadiness sheets, worldwide stocks — worldwide worth particularly — that is the place the puck has been headed already, and I feel it’ll proceed,” Josh Brown, CEO of Ritholtz Wealth Administration, instructed CNBC final week. Utilizing FactSet knowledge, CNBC Professional screened for stocks that boast tons of cash and might be properly positioned for a rocky yr. These have been the standards used: Stocks with excessive free cash movement yield of greater than 10% Low volatility (beta of lower than 1) Potential upside to cost goal Purchase ranking of not less than 40% Stocks that appeared on the display under embody these within the telecom, well being care, and client sectors, that are usually thought to be secure havens in a downturn. U.S.-listed Chesapeake Vitality Company was the one power inventory to seem on the display, with its free cash movement yield at practically 14%. Analysts gave it a 53.7% upside, and the bulk (76.5%) gave it a “purchase” ranking. The inventory, like most power companies, did properly previously yr — already climbing round 40%. Final week the agency introduced that it had agreed to promote half of its operations in south Texas for $1.43 billion in cash. Corporations within the well being care or pharmaceutical industries additionally made the reduce, reminiscent of U.S. firms Bristol-Myers Squibb and CVS Well being . Monetary companies agency Cantor Fitzgerald mentioned in a Jan. 17 be aware that 2023 might be Bristol-Myers Squibb’s “breakout yr,” and gave the inventory an chubby ranking. “BMY has one of one of the best 2023E development profiles of the US Pharma group … which stands out in a recession yr,” Cantor wrote. Canadian monetary agency Fairfax stood out for having the best FCF yield within the listing — at 30.4%, whereas Hong Kong-listed WH Group — the biggest pork producer on this planet — obtained the best purchase ranking at 94%. Two telecommunication companies — Britain’s Vodafone Group and Germany-based Deutsche Telekom — had among the many highest FCF yields at 27% and 23.7% respectively. Argus Analysis in a Jan. 20 report famous that Vodafone shares outperformed the benchmark over the previous three months. It added that its present valuation is affordable, given the gradual development outlook. — CNBC’s Michael Bloom and Fred Imbert contributed to this report.