As we have reported recently, many of the top firms on Wall Street that we cover at 24/7 Wall St. have made some final tweaks and changes to their top stock picks lists that they provide to institutional and high net worth clients. With this year proving to be a grind for investors, and the S&P 500 just barely positive, now is a good time for investors to maybe shed some losers and add some new stocks for the stretch run and 2016.

A new Jefferies research note adds a top energy stock to the company’s prestigious Franchise Picks list. The stocks that make the list are the highest conviction calls from the analysts and are expected to outperform in the coming year. We also highlight the three highest dividend-paying stocks on the list.

Gulfport Energy Corp. (NASDAQ: GPOR) is added to the Franchise Picks list and is one of the favorites around Wall Street. It is an independent oil and natural gas exploration and production company with its principal producing properties located in the Utica Shale of eastern Ohio and along the Louisiana Gulf Coast. In addition, Gulfport holds a sizable acreage position in the Alberta Oil Sands in Canada through its 24.9% interest in Grizzly Oil Sands.

Gulfport is a favorite of hedge fund managers, In fact, according to Insider Monkey, 36 hedge funds currently own positions in the stock. The Jefferies team note that the shares have been weak on gas prices and a lower growth outlook, a move lower they believe is overdone. With a multiple in line with peers and an expected ramp-up in production next year, the stock may be a great value at current levels.

The Jefferies price target for the stock is $36 and the Thomson/First Call consensus is much higher at $44.36. The stock closed Thursday at $25.21.

Here are the top three yielding stocks in the Franchise Picks portfolio.
AT&T

This company posted very solid third-quarter numbers, and many on Wall Street think the fourth quarter will be good as well. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE.

The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions. With shares trading at a very cheap 11.7 times estimated 2016 earnings, the company continues to expand their user base, and strong product introductions from smartphone vendors have not only driven traffic but increased device financing plans.

When AT&T reported third-quarter results last month, it reiterated 2015 guidance for double-digit revenue growth and continued consolidated margin expansion. Management expects capital spending to increase sequentially and they also estimate that free cash flow could be better than $4.5 billion. Third-quarter wireless subscriber additions came in higher than many Wall Street estimates, and DirecTV saw positive video additions where many expected losses.

AT&T investors receive an outstanding 5.68% dividend. Jefferies has a $40 price target, and the consensus estimate is $37.12. Shares closed Thursday at $33.10.

AbbVie

This is one of the top global pharmaceutical stocks at Jefferies. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Labs. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries

The stock fell 10% in late October after an FDA warning about liver risk with the company’s hepatitis C (HCV) products. However, Jefferies points out that this applies to a small sub-population of cirrhotics, who are 3% to 5% of the total patient population. Additionally, the next generation HCV product could be launched as early as 2017, and even of the entire Viekira Pak/Technivie business were lost over the next two years, it represents only 4% of net value.

Recently AbbVie announced a five-year growth plan that is very shareholder friendly. The company predicts total sales of about $37 billion in 2020, reflecting roughly 10% average sales growth over the next five years. For the third quarter, the company reported a profit of $1.24 billion, a significant increase from the $506 million it earned in the same quarter of 2014. The company’s sales increased by 8.40% year over year to $5.94 billion.

AbbVie investors receive a solid 4.06% dividend. The $85 Jefferies price target is among the highest on Wall Street. The consensus target is $75.29. Shares closed Thursday at $56.12.

Western Digital

This company is a long-time innovator in the storage industry and a leader in the total addressable hard disk drive (HDD) market. Western Digital Corp.’s (NASDAQ: WDC) storage solutions help to create, manage, experience and preserve digital content. The company is responding to changing market needs by providing a full portfolio of compelling, high-quality storage products with effective technology deployment, high efficiency, flexibility and speed.

The most compelling news is the stunning $19 billion purchase of SanDisk. This could be a strong addition to the Western Digital current offerings, and it could significantly benefit from SanDisk’s technology and portfolio leadership in the NAND flash semiconductor and enterprise flash systems market.

The drop-off in the PC business helps to spur initiative in the company’s cloud business, and analysts estimate that the company’s gross profit contribution from business critical (cloud) drives will exceed that of PCs by the second half of next year. Of all the stocks beaten down due to the poor PC environment, Western Digital may have the most upside potential, especially when Jefferies notes that in 2016 enterprise HDDs will have an average three-year cost of $100 per year versus $500 for NAND.

Investors are paid a very plump 3.15% dividend. Jefferies has a $95 price target, and the consensus figure is higher at $97.59. Shares closed Thursday at $63.62.

The Franchise Picks list makes sense for solid growth investors looking for total return. Many of the stocks pay good dividends and have upside price potential, without the risk of momentum stocks that are clearly overbought.

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