This time last year the market was in trouble, having the first down year in some time. One spin around the sun and we are in much better shape as the fourth quarter for 2016 begins. One thing is for sure though, stocks on a relative basis are more expensive, and the volatility is starting to creep higher as worries over a December rates increase and a tight presidential election have investors nervous.

One smart thing for growth stock buyers is to focus on total return and buy large cap quality stocks that will do well regardless of the near-term economic news. We screened the Merrill Lynch US 1 stock list, which is the firm’s highest conviction stock ideas, for companies with solid growth prospects that also pay dividends. These four look very solid now.

AT&T

This company has had an incredible run this year but is off over 10% in less than six weeks. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV 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 its shares trading at a very cheap 14.3 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic but increased device financing plans.

AT&T has several major catalysts that likely will drive strong network traffic demand: DirecTV Now and Mobile, “Data-Free TV” for DirecTV/U-verse subscribers and increasing penetration of unlimited data plans. Many on Wall Street believe that the company is well-positioned to address ongoing traffic requirements, with additional LTE capacity available and the ability to leverage small cell deployments.

Other top Wall Street analysts have cited the company’s positive commentary on free cash flow, and improving video/broadband trends later this year with single truck-roll and new converged offerings are expected to be coming next month.

AT&T investors receive a 4.9% dividend. The Merrill Lynch price target for the stock is $46, and the Wall Street consensus price objective is $42.83. Shares closed Wednesday at $39.16.

Coca-Cola European Partners

The former Coca-Cola Enterprises reported solid earnings and recently completed a big merger. Coca-Cola European Partners PLC (NYSE: CCE) is the leading Western European marketer, producer and distributor of nonalcoholic ready-to-drink beverages and one of the world’s largest independent Coca-Cola bottlers.

The company is the sole licensed bottler for products of Coca-Cola in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden. It operates with a local focus and has 17 manufacturing sites across Europe, where the company manufactures nearly 90% of its products in the markets in which they are consumed.

The company reported solid first-quarter earnings, though volumes dropped some. The recent merger with Coca-Cola Erfrischungsgetränke in Germany and Coca-Cola Iberian Partners, which serves Spain and Portugal, was a big catalyst. Shareholders approved the merger, and the S&P 500 removed the stock from the index as a result of the merger. The stock was crushed as index funds were forced to sell, giving investors an outstanding entry point.

Coca-Cola European Partners investors receive a 1.9% dividend. The Merrill Lynch price target is set at $44.50. The consensus target is higher at $44.83. The shares closed on Wednesday at $39.01.

Eli Lilly

This is another company with substantial upside potential. Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.

The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.

Eli Lilly reported mixed second-quarter earnings and revenue that were just slightly under consensus. While the overall numbers were unremarkable in some analyst’s view, Merrill Lynch is still very focused on the company’s outstanding late-stage product pipeline, which it and others on Wall Street view as very undervalued.

Shareholders receive a 2.5% dividend. Merrill Lynch has a $108 price target, and the consensus target is $97.80. Shares closed Wednesday at $81.75.

Qualcomm

This is a top technology stock that has done very well this year. Qualcomm Inc. (NASDAQ: QCOM) is a world leader in 3G, 4G and next-generation wireless technologies. The company includes the licensing business, QTL, and the vast majority of its patent portfolio. Its subsidiary Qualcomm Technologies operates substantially all of Qualcomm’s engineering, research and development functions, as well as substantially all of its products and services businesses, including its semiconductor business, QCT.

The growth of 3G mobile technologies in emerging markets, like China and India, has had a positive impact on Qualcomm and could be a difference maker going forward. Qualcomm is and has been for years a market leader in the development of 3G CDMA (Code Division Multiple Access) technologies. The company recently developed an LTE chipset that supports SCDMA (Synchronous Code Division Multiple Access) technology. China’s mobile network runs on this, and it could provide the company with a huge leg up in years to come.

Qualcomm reported third-quarter revenue and earnings that beat Wall Street estimates. Fourth-quarter guidance was also better than expected. In China, new semiconductor products are gaining share and management is making better progress with royalty collections.

Qualcomm investors receive a 3.2% dividend. The Merrill Lynch price objective is $68, while the consensus target is $64.38. Shares closed Wednesday at $66.84.

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While the US 1 list has slightly underperformed the S&P 500 year to date, it has outperformed since its inception by a large margin. The stocks are among the highest conviction picks at Merrill Lynch and make good addition to any growth portfolio.

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