Last Friday proved once again how volatile US stock markets can be. Amidst the speculations that the Federal Government may raise the key interests rates, US stocks fell like a pack of cards leaving many investors in dismay.
Investors are now concentrating on stocks that pay high dividend yields and yet remain stable irrespective of the socio-economic conditions prevailing in the country.
In spite of S&P 500’s 2.45% sell-off last week, investors are still seeking high dividend yielding stocks from companies with large market caps, assuming that the rates will continue to be low in 2017 as well.
For all investors, who are on the lookout for the safest and high paying dividend stocks from companies with large market caps, the following information might be of some help.
Stocks are selected on the following basis:
After carefully studying the stocks at Merrill Lynch’s research platform, trade analysts have suggested the following four dividend stocks, which have recorded a growth of 2.4%. They yielded more profits compared to the 30-year earnings of the US treasury bonds. These stocks are rated “buy” by Merrill Lynch and are also having a strong history of being less volatile/risky.
Though the stocks of AT&T (NYSE: T) have seen a loss of 10% over the last month or so, it had a great run throughout the year. AT&T is considered to be the world’s biggest pay TV provider, with numerous division offering its services in 11 Latin American countries apart from the US.
The company is also known for its strongest 4G LTE signals for wireless services in the US and also provides the most secure cloud services for public, private and corporate customers.
Currently its shares are trading low at 14.3 times estimated profits for this year. AT&T’s management has recently announced that the company is back on track and will reach or even exceed the estimations.
Trade analysts remain positive regarding the company’s free cash flow, as it prepares itself to improve its broadband services this October. Investors have already gained a huge dividend of 4.85%, and it is expected to increase even more in the coming years.
Merrill Lynch estimates a target price of $46 per share, whereas the Wall Street Consensus expects it to be around $42.84. Its stocks closed at $39.71 on Friday.
Coca-Cola (NYSE: KO), a company with a massive market cap and a strong brand presence worldwide, remains one of the safest investments in the US stock market. Top investors, including Warren Buffet have shown enough trust in its dividend stocks over the years and the company hasn’t let investors down.
Coca-Cola is the world’s biggest beverage manufacturer owing more than 500 brands across the globe. It sells approximately 1.9 billion units every single day, and serves customers in more than 200 countries.
On average, investors have been receiving a dividend payout of 3.31%. Merrill Lynch estimates a target price of $52 per share, whereas the Wall Street expects it to be around $47.76. Its stocks closed at $42.27 on Friday.
One of the large market cap pharmaceutical companies, Eli Lilly (NYSE: LLY), manufactures numerous core healthcare products on the market. The company’s main source of income comes from pharmaceuticals and products related to animal health care.
Its primary healthcare portfolio includes manufacturing medicines for bipolar disorder, pancreatic cancer, osteoporosis, depression, erectile dysfunction and hyperactivity disorder. It is also considered to be a pioneer in the diabetes segment.
Shareholders received a profit margin of 2.61% per dividend. Merrill Lynch estimates a target price of $96.70 per share. Its stocks closed at $78.24 on Friday.
Procter & Gamble
Irrespective of the fate of other stocks, Procter & Gamble’s (NYSE: PG) shares performed well in June. The reason being, 65% of the company’s overall sales come from foreign markets. Thus, as the value of the dollar declines, currencies of the foreign countries strengthen, providing P&G with the required cushion to neutralize its losses in the US market.
This makes its stock dividends one of the most lucrative options for investors who have a conservative approach. The company’s portfolio pretty much consists of everything that a normal household requires. From beauty to healthcare and family care, the company sells almost everything necessary in the everyday life.
P&G recorded an outstanding growth last quarter, earning its shareholders a profit of 3.11%. Merrill Lynch estimates a target price of $95 per share, whereas the Wall Street expects it to be around $92.38. Its stocks closed at $86.24 on Friday.
Though there is nothing special about the analysis presented above, it is important to note that these companies have been around for a while now, and will continue to be for years to come.
Apart from that, these companies are almost immune to the changing political scenarios and economical situations. Their dividend stocks are a perfect fit for investors concerned about volatile market conditions. These stocks present great options for conservative growth and help investors build a great income portfolio.