Investors are bracing for a dismal 2023 by doubling down on cash-rich companies. “We prefer companies that generate cash over those that need capital to grow. Not only are interest rates more likely to remain higher than they were in the past, but we’re also likely to exit the era of super accommodative monetary policy,” Bank of America said in a Jan. 16 note. The higher the free cash flow yield, the better the company’s ability to meet its debt obligations. A company with high free cash flow can also access cash more quickly in the event of an emergency or opportunity. “Dividend-paying companies, big cash-flow companies, quality balance sheets, international stocks – especially international value – this is where the game has turned and I think it will continue,” Josh Brown, CEO of Ritholtz Wealth Management, told CNBC last week. Using FactSet data, CNBC Pro screened for stocks that have a lot of cash and could be in good standing during a rough year. These are the criteria used: Stocks with a high free cash flow yield of over 10% Low volatility (beta less than 1) Upward potential against target Buy rating of at least 40% Stocks The stocks that appear on the screen below include those in the telecommunications, healthcare, and consumer sectors, which are generally considered safe havens during recessions. The U.S.-listed Chesapeake Energy Corporation is the only energy stock on the screen, with free cash flow delivering a yield of nearly 14%. Analysts gave it a 53.7% gain and a majority (76.5%) rated it as “buy”. The stock, like most energy companies, has been doing well over the past year – up about 40%. Last week, the company announced that it had agreed to sell part of its operations in south Texas for $1.43 billion in cash. Companies in the healthcare or pharmaceutical industries also make the list, such as US companies Bristol-Myers Squibb and CVS Health. Financial services firm Cantor Fitzgerald said in a January 17 note that 2023 could be a “breakthrough year” for Bristol-Myers Squibb, and rated the stock too high. Cantor writes: “BMY has one of the best growth records in 2023E for US Pharmaceuticals…stands out in a recession year. Canadian financial firm Fairfax stands out for having the highest FCF yield on the list — at 30.4%, while Hong Kong-listed WH Group — the world’s largest pork producer — receives highest buy rating at 94%. Two telecommunications companies — Britain’s Vodafone Group and Germany-based Deutsche Telekom — had the highest FCF yields at 27% and 23.7%, respectively. Argus Research in a January 20 report noted that Vodafone stock outperformed the benchmark over the past three months. It added that its current valuation is reasonable, with a slow growth outlook. — Michael Bloom and Fred Imbert of CNBC contributed to this report.