One of the best investing plans, especially for long-term investors, is to look for solid total return. Owning quality stocks that pay a good and increasing dividend also enhances the chances for success, because even if the stocks don’t show price appreciation, the dividend gets paid every quarter. Total return is the combination of price appreciation and dividend payout. If a stock is up 5% and the dividend is 3%, the total return is 8%.
One of the best way we know for finding solid stocks that can provide total return is to look at the highest conviction stocks picks at a Wall Street firm. We screened the UBS Equity Focus list for the top dividend yielding members and found four solid companies for investors to consider now.
Boeing
This top aerospace industrial has dropped a whopping 14% since the beginning of the year.
Boeing Co. (NYSE: BA) designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services worldwide.
Top Wall Street analysts have increased confidence in continuing good demand, and they note that the company has made announcements in the past that support the thesis that productivity and margins will continue to improve. 787 execution is good as the company works through the backlog, and cash flow looks to be strong with 787 deliveries and C-17 orders. Some Wall Street analysts also point to low oil prices as a bullish indicator for the top carriers who are Boeing’s big customers.
The company reported numbers that beat estimates, but charges weighed on the overall report. However, the company is continuing what is a sizable share buyback program. We covered the Wall Street take on the earnings in depth.
Boeing investors receive a 3.25% dividend. The Thomson/First Call consensus price target is $145.17. The stock closed Monday at $134.01 per share.
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Cisco
This is one of the top mega-cap technology stock picks on Wall Street. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide. It provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.
Cisco offers service provider video infrastructure, including set-top boxes, cable/telecommunications access products, and cable modems, as well as video software and solutions. In addition, it provides collaboration products comprising unified communications products, conferencing products, telepresence systems and enterprise mobile messaging products; data center products, such as blade, rack and modular servers, fabric interconnects, software and server access virtualization solutions; security products, including network and data center security, advanced threat protection, web and email security, access and policy, unified threat management, and advisory, integration, and managed services; and other products, such as emerging technologies and other networking products.
The company posted outstanding earnings back in February, and is scheduled to report this quarter on May 18. Many on Wall Street have raised their price targets for the networking giant significantly. Cisco is also one of the 24/7 Wall St. top 10 stocks to own for the next decade.
Analysts across Wall Street point to an estimated double-digit bookings momentum for Cisco’s Meraki Cloud Services. Many think that Meraki is likely to be a $1 billion plus run-rate business this year, with an incredible 50% to 70% compounded annual growth rate. A jump from 40 GE to 100 GE data center switching and next generation security are also adding to the total sales profile and product mix.
Cisco investors receive a 3.8% dividend. The consensus target is set at $29.62. Shares closed most recently at $27.38.
Schlumberger
This top oil services company came in with results that beat expectations. Schlumberger Ltd. (NYSE: SLB) remains the largest oilfield services company in the world for now, with far-reaching operations all around the globe, and it could be poised for years of solid growth despite the huge turn down in oil pricing. Top Wall Street analysts think the company will continue to drive margins on execution, technologies and efficiencies. Russia, Saudi Arabia, Iraq and China are expected by some to be the strongest markets, if geopolitical concerns remain somewhat in check.
The company reported solid first-quarter earnings, and revenues come in slightly above Wall Street estimates. Recent reports have indicated the company may be looking to buy back its former Iranian unit. The report also noted that Schlumberger sold Well Services of Iran to Nima Energy, a Hong-Kong based holding company, when it left Iran, and the sales-agreement reportedly included a provision that could give the oil services giant “First right to buy back the company when sanctions were lifted,” per Dow Jones news.
Schlumberger investors receive a 2.55% dividend. The consensus price target is $87.41. Shares closed Monday at $79.40.
United Technologies
This is a very diversified company with large government contract exposure. United Technologies Corp. (NYSE: UTX) is an industrial that provides high-technology products and services to aerospace industries and building systems worldwide. Its segments are UTC Climate, Otis, Controls & Security, UTC Aerospace Systems, and Pratt & Whitney.
Many Wall Street analysts believe the company is strategically positioned to benefit from two megatrends in the long-term: urbanization and commercial aerospace. The company received good news recently as the military and foreign buyers are set to increase purchase of the F-135 Jets. UTC’s Pratt & Whitney division, which builds the F135 engine for the military, earns a superb 22.5% profit margin on its products.
United Technologies investors receive a 2.53% dividend. The consensus price target is $111.50. The stock closed Monday at $104.37.
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Solid blue chip stocks paying good dividends make sense now. The political cycle is in full swing and that could lead to a volatile summer as we head to the conventions. These are outstanding holdings for long-term, patient portfolios.
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