This Jefferies dividend portfolio is beating the market and set to do it again

As uncertainty looms, investors looking for stability should consider this high-dividend yielding strategy that's outperformed in the past and should continue to do so, according to Jefferies. Dividends, a payout of a portion of a company's profits to shareholders, offer a way for investors to make a stable income during tough and volatile times for the markets. And this year investors are hunting for ways to play defense as inflation remains elevated, the yield curve inversion flashes warnings signals and Wall Street braces for slowing growth. Jefferies thinks it has an answer to this conundrum, with its dividend portfolio that outperformed the MSCI USA index by 7.1% and boasts a cumulative outperformance of 6.8% since 2021. The portfolio's broken down by bond-proxies and high-quality yield stocks. Bond proxies refers to high-yield stocks with low growth -- like bond coupons -- typically within sectors that offer stable predictable cash flows. Here's the criteria Jefferies used to find its bond proxy stocks: Defensive companies with a market cap exceeding $5 billion Dividend yield above 3% Low growth with a 2023 to 2024 earnings per share compounded annual growth rate between -15% and 15% High earnings certainty (mean/standard deviation of consensus forecasts greater than 8x) Sustainable dividends with a track record of a cut less than once every four years Dividend per share sustainability star rating of 3 or more Positive free cash flow conversion The high-quality yield group, meanwhile, searches for companies in the top two quintile of high-quality U.S. companies, with a quality score of 4/5 or 5/5 and a market cap exceeding $5 billion. They all offer a 12-month forward dividend yield above the median and are expected to be highly profitable, with a return on equity (ROE) and history of return on invested capital exceeding 10%. Here are 10 stocks included: Altria offers the highest 12-month forward dividend yield of the group at 8.4%, with an EPS compounded annual growth rate of 4.6%. Earlier this month, the Marlboro maker agreed to buy e-cigarette startup NJOY for about $2.8 billion. Popular staples maker Procter & Gamble was also included, with a 12-month forward dividend yield of 2.8%. The stock's down about 5% this year after a 7.4% slump in 2022. It outperformed the broader market as investors flocked to safety. Even as the crisis overwhelms the banking sector, investors are finding some pockets of sunshine. Jefferies named Morgan Stanley among its dividend picks, with a 3.4% yield. Shares have struggled in recent weeks amid Silicon Valley Bank's collapse , down about 8.8% in March but up 3.5% for the year. Technology stocks have been on a tear as bank collapses rattled financial markets, bond yields fell and investors searched for safety in megacap names with strong cash flows. Many of these companies often rely on low-rate environments to support lofty valuations. Chip stocks have also outperformed, with Broadcom up about 15% this year and more than 8% in March alone. The company offers a 12-month dividend yield of 3%. Tapestry , Coca-Cola , Walgreens Boots Alliance and AT & T also made the list. -- CNBC's Michael Bloom contributed reporting