The way 2016 started off, it looked like we were in for a very dreary year. By mid-February the market had dropped a stunning 11.4% in six short weeks. The second market correction in six months and the kind of market volatility and action that brings all the perma-bearish commentators like David Tice out for a while. The question is whether it is time to follow tradition and “sell in May and go away”?

The answer to that question is probably no. With yields still at historic lows, and looking to stay that way, and dollar strength waning, it’s probably time to rotate into stocks that pay a solid dividend, have a global footprint and reported solid first-quarter numbers. We screened the Merrill Lynch research universe database for stocks that have those traits and found four stellar ideas. All are rated Buy.

Altria

The maker of tobacco products and wine has posted very solid numbers through the first half of the year and the fourth quarter is looking good as well. Altria Group Inc. (NYSE: MO) is a top mega-cap consumer discretionary stock to buy on Wall Street, and the company’s Marlboro brand remains one of the most recognizable in the world. Many Wall Street analysts concede that the stock has solid downside support owing to the generous dividend yield, which remains at a huge premium in relation to the 10-year Treasury rate. Cash flow generation and the return of cash to Altria shareholders remain key facets of the company’s total shareholder return. The analysts expect support of the strong dividend, which they believe will continue to climb, and strong share repurchase activity.

To diversify away from cigarettes and cigars, Altria has expanded its portfolio into new categories like wine, e-cigarettes and a 27% stake in brewer SABMiller, which together generated nearly 10% of its pre-excise tax revenue last quarter. With SABMiller being acquired, Altria will have a huge stake in the world’s biggest beer company.

The company reported solid first-quarter numbers that beat estimates this week, and more importantly, reaffirmed guidance going forward. Altria reported net income of $1.22 billion for the quarter, or $0.62 per share, up from $1.02 billion, or $0.52 per share, for the same period last year. Adjusted earnings were $0.72 per share, beating the FactSet consensus estimate. Revenue for the quarter totaled $6.07 billion, up from $5.80 billion and ahead of the FactSet consensus. So all-in-all, a very strong set of numbers.

Altria investors receive 3.67% dividend. The Merrill Lynch price target for the stock is $66, and the Thomson/First Call consensus estimate is $65.75. The stock closed Thursday at $62.19.

Coca-Cola

This company remains a top Warren Buffet holding and offers not only safety, but an incredible strong worldwide brand. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Led by Coca-Cola, its portfolio features 20 billion-dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade and Minute Maid. Globally, it is the top provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy its beverages at a rate of more than 1.9 billion servings a day.

Top analysts have noted that there are four main drivers of potential continued upside for the stock.

1. Volumes are accelerating due to re-franchising.
2. The importance of new marketing and the impact on category growth and market share trends.
3. A growing cost culture at the company that should result in a best-in-class profit per employee metrics.
4. Most importantly perhaps, the emergence of pricing power for the drink giant.

Despite reporting better than expected first-quarter results, the stock was hit as many portfolio managers were overweight consumer stocks, and the market noted that the company’s multiple had jumped higher than peers. It is important to remember though that the company own 31.5% of Monster Beverage, which continues to deliver big numbers.

Coca-Cola investors receive a 3.14% dividend. Merrill Lynch has a $52 price target. The consensus target is $47.91, and the stock closed Thursday at $44.63.
General Motors

This company is in the automobile sector, and shares look to be very inexpensive at current levels. Despite all the recall troubles and litigation issues, hedge funds and mutual funds are continuing to stick with General Motors Co. (NYSE: GM), as many view the stock as very undervalued. GM trades just below ad incredible 5.75 times estimated 2016 earnings. The company, like competitor Ford, has benefited from incredible sales in China to boost revenue. GM invested heavily in China decades ago, and it grabbed a big chunk of what is now the world’s largest auto market.

With the company facing continued possible punitive damages over ignition switches, there will continue to be a headline risk cloud over the stock. Long-term patient investors that can look beyond current issues may stand to make outstanding money on the auto giant, especially as the oil price plummet and low gasoline prices continue to push new buyers into showrooms.

The company reported very solid first-quarter earnings last week, and with gas prices staying at the lowest levels in years, and GM producing some of the best new models in years, the future for the battered stock looks very good.

Investors are paid a 4.73% dividend. The $44 Merrill Lynch price target is higher than the consensus target of $38.25. Shares closed Thursday at $32.44.

Royal Dutch Shell

This company has survived the plunge in oil pricing plunge as good as or better than any other major integrated. Royal Dutch Shell PLC (NYSE: RDS-A) operates as an independent oil and gas company worldwide. The company explores for and extracts crude oil, natural gas and natural gas liquids (NGLs).

Royal Dutch Shell also converts NGLs to provide fuels and other products; markets and trades crude oil and natural gas; transports oil; liquefies and transports gas; extracts bitumen from mined oil sands and converts it to synthetic crude oil; and generates electricity from wind energy. In addition, the company engages in the conversion of crude oil into a range of refined products, including gasoline, diesel, heating oil, aviation fuel, marine fuel, liquefied natural gas for transport, lubricants, bitumen and sulphur; production and sale of petrochemicals for industrial customers; refining; trading and supply; pipelines and marketing; and alternative energy businesses.

The company’s $50 billion acquisition of BG Group finally closed in February, and a reported 2,800 jobs will be cut. This continues the reorganization efforts that began last year with 7,500 job cuts. The company has not reported first quarter earnings yet, so investors should be aware of that.

Royal Dutch Shell investors receive a huge 6.02 % dividend. The Merrill Lynch price target is $61.90. The consensus target was not posted. Shares closed Thursday at $53.08.

It’s not the easiest thing to sell in May and go away, unless you don’t pay commissions, which few of us have the luxury of not doing. However, rotating to safer areas for the next six months or so does make good sense, especially in what could be a volatile election year.

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