Investing
The Election Could Get Ugly: 4 Safe Dividend Stocks to Move to Now
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It has happened before, and it could happen again. While everybody is well aware of the rancor that has accompanied the election cycle for well over a year, most of us probably are hoping that when the results are final that will be it. There has been a fair amount of concern about the actual election itself, and things could get pretty dicey if one candidate doesn’t accept the results.
There were similar issues after the 2000 election, and the stock market was not happy with the long delay before the winner was finally declared. We searched the Merrill Lynch research database for very safe stocks that should do fine in the event there is an issue. All are rated Buy.
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.
Despite reporting second-quarter earnings that came in above some estimates, slower growth and flat volumes brought out the sellers and they tagged Coke stock big time. It is important to remember though that the company owns 31.5% of Monster Beverage, which continues to deliver big numbers. Coca-Cola will report third-quarter earnings this week.
Coca-Cola investors receive a 3.33% dividend. The Merrill Lynch price target for the stock is $50, while the Wall Street consensus target is $47.44. The stock closed Monday at $42.05.
Edison International
This top utility continues to raise its dividend regularly. Edison International (NYSE: EIX) generates electricity through hydroelectric, diesel, natural gas, gas fueled, combustion turbine, nuclear and photovoltaic sources. It supplies electricity primarily to residential, commercial, industrial, agricultural and other customers, as well as public authorities through transmission and distribution networks.
Wall Street analysts like Edison International as another company that could beat current earnings estimates for the quarter. Edison International remains well positioned to compete in the market place. The company says that the billions it is spending on upgrades goes predominantly to its networks, and that it only owns about 15% of the generation that its customers consume. The other 85% is purchased on the open market.
Investors are paid a 2.7% dividend. Merrill Lynch has a $78 price objective. The consensus target is $81, and the stock closed Monday at $71.22.
Kraft Heinz
This top consumer staple stock makes good sense for nervous investors. Kraft Heinz Co. (NYSE: KHC) is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world, with eight $1 billion plus brands. A globally trusted producer of delicious foods, Kraft Heinz provides high-quality, great taste and nutrition for all eating occasions whether at home, in restaurants or on the go. Its iconic brands include Kraft, Heinz, Capri Sun, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Weight Watchers Smart Ones and Velveeta.
Consumer staples are expected to continue to do well this year, and this is one of the top companies in the sector. The company reported very solid earnings, and analysts across Wall Street are generally bullish on the potential for solid earnings continuing through 2016 and into next year.
Kraft Heinz shareholders receive a 2.7% dividend. The Merrill Lynch price target is $98. The consensus target is $90.29. The stock closed most recently at $87.02.
Verizon Communications
This top telecommunications company is rated Buy at Merrill Lynch. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world. Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.
The company reported solid third-quarter earnings; however, revenues came in short of Wall Street and Merrill Lynch expectations. Verizon also recently announced the purchase of Yahoo’s core operating business for $4.8 billion in cash. The analysts feel it plays into Verizon’s strategic drive to expand into advertising and content, and they also think the transaction is largely immaterial from a financial perspective.
Investors receive a 4.8% dividend. The $59 Merrill Lynch price objective compares with the consensus target of $54.05. Shares closed Monday at $48.21.
While the likelihood that the election results could be contested are small, if they are you can bet that like in 2000 shareholders won’t be pleased. These safe dividend-paying stocks may be just the place to move from crowded momentum trades.
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