Investors searching for savvy portfolio picks are battling a toxic mix of political, social and economic changes sparked by the coronavirus crisis. 

Investors should be careful to avoid companies that could default on their debt, Tobias Levkovich, equity strategist with Citigroup, recently wrote in a note to clients.

They should look for companies with healthy dividends. He and his team screened for companies with low likelihood of default, as implied by credit-derivatives markets, and then looked for ones with higher dividend payouts, Barron's explained.

His stock picks:

1. Cisco Systems (CSCO), a tech company that yields 3.5%
2. Merck & Co. (MRK), a pharmaceutical company yielding 3.1%
3. Lockheed Martin (LMT), a defense company that pays a yield of 2.5%
4. Caterpillar (CAT), an industrial manufacturer yielding 3.8%
5. Quest Diagnostics (DGX), a medical-testing company yielding 2.1%
6. Johnson Controls International (JCI), a building-safety, heating and cooling conglomerate that yields 3.7%
7. Trane Technologies (TT), a company that makes building heating and cooling systems and offers a dividend yield of 2.6%
8. Procter & Gamble (PG), a home-goods company that yields 2.8%
9. Union Pacific (UNP), a railroad paying a 2.5% dividend
10. Westrock Co. (WRK), a packaging company with a 3.2% yield.

All 10 of those companies have a low market-implied probability of default, according to Citigroup, meaning they likely won’t miss debt payments or be pushed into bankruptcy, Barron's said. "And because their balance sheets are relatively strong, their dividends are likely safe. Those dividends could become a more important factor determining future performance, in Levkovich’s view," Barron's said.

“Payouts were more crucial in the past (prior to the 1980s) and could be so again,” he says in his note.

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