History says these 30 controversial stocks are likely to outperform, according to UBS

  • Investors gravitate toward the same stocks to their detriment, a new report indicates.

  • Companies that Wall Street analysts disagree about tend to outperform over time.

  • Here are 30 stocks that analysts are split about right now, according to UBS.

There’s an old saying that remains relevant to investors: If we all think alike, no one is thinking.

Groupthink is prevalent everywhere, including on Wall Street. With the exception of a few outspoken contrarians, investors tend to ride the stock market’s momentum instead of going against the grain since missing a massive rally can be costly — especially for fund managers.

However, picking the same stocks as everyone else can hinder outperformance.

Stocks that equity analysts agree either have a bright or dismal future have historically lagged behind those that the Street is split on, according to a mid-March report from UBS.

The firm found that companies with a higher so-called ratings dispersion from analysts have beaten those with low dispersions by 1.6% a year since the end of 2010. High-dispersion stocks have outperformed their low-dispersion peers 74% of the time in that span, UBS noted.

For reference, high-ratings-dispersion stocks’ returns are better than high growth over low growth and high momentum over low momentum. Even still, this strategy is usually overlooked.

Within this high-dispersion strategy, companies tied to technology or adjacent sectors tend to perform best, according to UBS. Another reason to consider this method is that it has a low correlation to other stocks, which is a risk-management plus.

30 stocks that Wall Street is split on

Since analyst alignment can be a bad omen for companies, it follows that investors should look for firms that can spark debates among those who follow them.

Below are 30 stocks with the highest dispersion in ratings from analysts, sorted alphabetically by sector and within their sector, if applicable. Along with each name is its ticker, market capitalization, and sector. Note that UBS doesn’t necessarily recommend these companies.

1. Electronic Arts

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Ticker: EA

Market cap: $36.6B

Sector: Communication Services

2. Paramount Global

Paramount Global

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Ticker: PARA

Market cap: $8.1B

Sector: Communication Services

3. Verizon Communications

Verizon Communications

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Ticker: VZ

Market cap: $169.4B

Sector: Communication Services

4. Warner Bros. Discovery

Warner Bros. Discovery

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Ticker: WBD

Market cap: $21.7B

Sector: Communication Services

5. CarMax

CarMax

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Ticker: KMX

Market cap: $13.1B

Sector: Consumer Discretionary

6. Carnival

Carnival

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Ticker: CCL

Market cap: $21B

Sector: Consumer Discretionary

7. Ford Motor

Ford Motor

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Ticker: F

Market cap: $49.4B

Sector: Consumer Discretionary

8. Lululemon Athletica

Lululemon Athletica

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Ticker: LULU

Market cap: $56.8B

Sector: Consumer Discretionary

9. Pool

Pool

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Ticker: POOL

Market cap: $15.5B

Sector: Consumer Discretionary

10. Tesla

Tesla

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Ticker: TSLA

Market cap: $538.8B

Sector: Consumer Discretionary

11. APA Corp.

APA Corp.

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Ticker: APA

Market cap: $9.8B

Sector: Energy

12. EQT Corp.

EQT Corp.

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Ticker: EQT

Market cap: $15.1B

Sector: Energy

13. American Express

American Express

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Ticker: AXP

Market cap: $161.4B

Sector: Financials

14. Ameriprise Financial

Ameriprise Financial

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Ticker: AMP

Market cap: $41.6B

Sector: Financials

15. CME Group

CME Group

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Ticker: CME

Market cap: $78.6B

Sector: Financials

16. Comerica

Comerica

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Ticker: CMA

Market cap: $6.9B

Sector: Financials

17. Northern Trust

Northern Trust

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Ticker: NTRS

Market cap: $16.8B

Sector: Financials

18. PNC Financial Services

PNC Financial Services

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Ticker: PNC

Market cap: $60.9B

Sector: Financials

19. Align Technology

Align Technology

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Ticker: ALGN

Market cap: $24B

Sector: Healthcare

20. Amgen

Amgen

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Ticker: AMGN

Market cap: $148.3B

Sector: Healthcare

21. Edwards Lifesciences

Edwards Lifesciences

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Ticker: EW

Market cap: $55.5B

Sector: Healthcare

22. Illumina

Illumina

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Ticker: ILMN

Market cap: $21.1B

Sector: Healthcare

23. Steris

Steris

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Ticker: STE

Market cap: $23B

Sector: Healthcare

24. Vertex Pharmaceuticals

Vertex Pharmaceuticals

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Ticker: VRTX

Market cap: $107B

Sector: Healthcare

25. Carrier Global

Carrier Global

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Ticker: CARR

Market cap: $52.6B

Sector: Industrials

26. Caterpillar

Caterpillar

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Ticker: CAT

Market cap: $170.9B

Sector: Industrials

27. Generac

Generac

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Ticker: GNRC

Market cap: $7B

Sector: Industrials

28. Old Dominion Freight Line

Old Dominion Freight Line

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Ticker: ODFL

Market cap: $47.8B

Sector: Industrials

29. Rockwell Automation

Rockwell Automation

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Ticker: ROK

Market cap: $32.9B

Sector: Industrials

30. United Rentals

United Rentals

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Ticker: URI

Market cap: $45.5B

Sector: Industrials

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