Morningstar has revealed its pick of global stocks with the highest dividend yields.

The investment research firm said their selection is composed of high-quality names that are widely held by fund managers and pay dividends above the S&P 500 average.

In a note entitled, "Our Ultimate Stock Pickers' ... Dividend-Yielding Stocks," Morningstar noted that searching for yield can be risky given the current volatility.

"Price risk remains elevated as does the risk that companies may not be able to sustainably maintain current dividends due to economic strain," the analysts said. "Although the market has recovered as the pandemic has waned, the majority of the stocks on our dividend-yielding list remain undervalued."

In fact, three of the stocks have the potential to rise by more than 30%, according to Morningstar's analysts.

These are Verizon Communications, GSK and Philips.

Verizon

Wireless telecommunications company Verizon currently offers a dividend of around 6.4%. Morningstar said it expects it to deliver "consistent results" over the long term, despite intense competition from large rivals.

"The leading scale enables Verizon to generate the highest margins and returns on capital in the industry, despite heavy investment," the analysts wrote.

Verizon is currently trading at its lowest level in the past decade after falling by nearly 20% this year, according to Koyfin data. Morningstar's Michael Hodel said the stock is undervalued by at least 30%.

GSK

London-headquartered pharmaceutical giant GSK is also undervalued by more than 40%, according to Morningstar analyst Damien Conover.

Earlier this year, GSK spun off its consumer healthcare business into a separate entity to focus its efforts on researching pharmaceuticals.

Morningstar says GSK's large portfolio of drug patents, economies of scale and global distribution network mean the current economic uncertainty is unlikely to have a material impact on its future earnings.

The stock, which has a secondary listing on the NYSE, has fallen by more than 25% since its peak this summer.

Philips

Dutch multinational Philips pays a dividend of 5.1% but trades at a 40% discount to its fair value, according to Morningstar.

Philips' stock, which also trades in New York, has fallen to a decade low following criticism over its handling of a global recall of respiratory machines.

While French prosecutors probe Philips over the recall, Paris-based investment bank Societe Generale reportedly upgraded the stock to buy, saying its shares overly reflect the bad press and are currently undervalued.