With the market running above 18,000 on the Dow and 2,100 on the S&P 500, many of our readers may be starting to wonder if it’s time to take some money off the table after the spectacular run off the February lows. The fact of the matter is, it is probably wise to stay invested as yields remain historically low, but it may be a good time to look for value ideas to move into.

In a recent research report from Jefferies, as they do every week, the analysts highlight their top value ideas to buy now. This week’s set of ideas make good sense, and rotating from some big winners to these is a solid idea for some investors. All four of the top value ideas are rated Buy at Jefferies, and they pay solid dividends too.

Ares Capital

This company is a high-yielding business development company (BDC). Ares Capital Corp. (NASDAQ: ARCC) is a leading specialty finance company that provides one-stop debt and equity financing solutions to U.S. middle market companies, venture capital backed businesses and power-generation projects. Ares Capital originates and invests in senior secured loans, mezzanine debt and, to a lesser extent, equity investments through its national direct origination platform. Its investment objective is to generate both current income and capital appreciation through debt and equity investments primarily in private companies.

Jefferies believes the strength of company’s origination platform, sizable balance sheet and ample liquidity position the company favorably in a very competitive investing environment. Other Wall Street analysts also believe that with current tight spread environment, Ares Capital has the scale and industry relationships to continue to make competitive, high-credit-quality investments.

Ares has a diversified portfolio totaling $9.1 billion at fair value. It consists of investments in 218 portfolio companies. The company made a total of $972 million in new investment commitments in the fourth quarter of 2015. In the March quarter, originations are expected to rise on increased programs and opportunities.

Ares shareholders are paid a very rich 10.09% dividend. The Jefferies price target for the stock is $17. The Thomson/First Call consensus target is $16.22. Shares closed Wednesday at $15.07.

FirstEnergy

This is a higher yielding utility stock for accounts needing income but worried about the current environment. FirstEnergy Corp. (NYSE: FE) is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. Its transmission subsidiaries operate more than 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions.

The company posted mixed fourth-quarter numbers, matching earnings estimates but the revenues came in below Wall Street expectations. The Jefferies team is positive on the stock as they feel the FERC will accept the company’s power purchase agreement, which should minimize the need to utilize equity. They note that at current trading levels, there is no probability of that approval factored in and assumes a $2 billion equity issuance.

FirstEnergy investors receive a rich 4.14% dividend. Jefferies raised its price target to $40.50 from $36, and the consensus figure is lower at $37.59. Shares closed on Wednesday at $34.76.
Novartis

This company is among the world’s largest pharmaceutical drug makers by sales. Novartis A.G. (NYSE: NVS) develops, manufactures and markets a range of health care products worldwide. It operates through three segments. The Pharmaceuticals segment offers patented prescription medicines for oncology, neuroscience, retina, immunology and dermatology, respiratory, cardio-metabolic, established medicines and cell and gene therapies.

The Alcon segment provides eye care products, including ophthalmic surgical equipment, instruments, disposable products and intraocular lenses; medicines to treat chronic and acute diseases of the eye and over-the-counter medicines for the eye; and contact lenses and lens care products.

The Sandoz segment offers generic prescription medicines that include active ingredients and finished dosage forms of pharmaceuticals for dermatology, respiratory and ophthalmic, cardiovascular, metabolism, central nervous system, pain, gastrointestinal and hormonal therapies; active pharmaceutical ingredients and intermediates primarily antibiotics; protein or other biotechnology-based products; and cytotoxic products for the hospital markets, as well as biotechnology manufacturing services to other companies.

Investors may want to wait until after earnings to buy shares as the analysts feel that the print could be light. But they note the stock screens very good on price-to-earnings growth and remains the firm’s number two global pharmaceutical pick.

Novartis investors receive a 3% dividend. The Jefferies price target was not set in U.S. dollars. The consensus target, however, is posted at $94.50. Shares closed most recently at $76.59.

WestRock

Last summer saw the merger of two top packaging and container companies that could provide an outstanding opportunity for investors, as the stock has been absolutely mauled since the merger. WestRock Co. (NYSE: WRK) is the completed and merged entity that combined old Rock-Tenn and MeadWestvaco. WestRock becomes the second-largest U.S. packaging company, valued at $10.7 billion, trailing only International Paper with a market cap of just under $15 billion. WestRock is expected to generate net sales of $15.7 billion and adjusted EBITDA of $2.9 billion. This includes the impact of $300 million in estimated annual synergies, to be achieved over three years.

Jefferies notes that the company announced a stock repurchase program last year of 40 million shares, equal to 15% of the shares outstanding. It also announced a very generous 17% increase in the company dividend. The current dividend will be $1.50 per share, or 37.5 cents per quarter.

WestRock trades with a 10 or so free-cash-flow yield, and owing to demand resiliency and lower spending, the Jefferies team believes cash flow can hold up even in a tougher economic environment. They also think that the stock could be up 25% to 50% if containerboard prices hold, which they have recently.

WestRock investors will receive a very tempting 3.8% dividend. The Jefferies price target is $56, but the consensus is set at $70.56. Shares closed Wednesday at $39.55 apiece.

Needless to say, if earnings come in lousy, which so far they have not overall, the markets could take a new leg down. These stocks are trading far below 52-week highs and stand a much better chance of holding their ground than a high-flying momentum stock, should earnings miss the mark.

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