Regardless of what hits the market, nothing seems to be big enough to knock it back down in a big way. While the S&P 500 is up for the year, most of the market is fully valued on a historical basis. In fact, the current forward price to earnings for the S&P 500 is at 16.1 times earnings, and that is exactly the 25-year figure. The Shiller price-to-earnings figure is currently at 32.1 times earnings, versus a 25-year figure of 26.6 times.

Given the pricey nature of the market overall, and not wanting to get caught in value traps, we screened the Merrill Lynch research database for stocks rated Buy that pay a decent dividend and a had good upside potential to the firm’s price target. We found four excellent candidates.

DowDupont

This result of a blockbuster merger in 2017 has emerged bigger and stronger, and the stock is on the Merrill Lynch US 1 list. DowDupont Inc. (NYSE: DWDP) is a diversified chemical company with $79 billion in sales in 2017, and it was formed as a result of the merger of Dow and DuPont.

The company is organized in three principal divisions: Agriculture (20% of EBITDA), Material Science (55%) and Specialty Products (25%). It intends to separate these into three public entities by 2020.

The stock has underperformed this year, and the concerns over the trade issues with China are continuing to keep shares under pressure. The stock is down over 15% from highs that were printed in January.

Shareholders receive a 2.31% dividend. The Merrill Lynch price objective for the shares is $84, and the Wall Street consensus price target is $81.72. The stock closed Friday at $65.93.

International Game Technology

This company was hit since doing a secondary in which a large shareholder did a forward sale, and it is offering a great entry point. International Game Technology PLC (NYSE: IGT) is the global leader in gaming. The company enables players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Interactive and Social Gaming.

Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, International Game Technology gaming solutions anticipate the demands of consumers wherever they decide to play. The company has a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and it creates value by adhering to the highest standards of service, integrity and responsibility.

Many top Wall Street analysts feel the company will be one of the major gaming infrastructure beneficiaries from the recent Supreme Court ruling allowing sports betting in all 50 states.

Shareholders receive a 3.37% dividend. The $35 Merrill Lynch price target compares to the consensus target of $33.83. The stock closed trading on Friday at $23.74.

Intel

This semiconductor leader is working hard to focus more on Internet of Things and data center cloud spending and away from PCs. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.

The company’s platforms are used in various computing applications, comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Intel announced the surprise resignation of the company’s chief executive officer recently while also pre-announcing second-quarter results, which came in above analysts’ expectations. Despite the good results, the startling resignation hit the stock, and the Merrill Lynch feels that investors should take advantage of the selling.

Investors receive a 2.35% dividend. Merrill Lynch has set its price target at $62. The consensus price objective is $58.87, and shares closed trading Friday at $51.37. They are down almost 15% over the past month.

Marvell Technology

Last year the company announced a bold $6 billion bid to buy Cavium. Marvell Technology Group Ltd. (NASDAQ: MRVL) is a fabless supplier of mixed-signal and analog semiconductor products to a number of storage, computing and communication applications, including hard disk drives, personal computers, servers, Ethernet switches, printers and connectivity markets.

Top analysts around Wall Street are very positive on the company’s purchase of Cavium, and many feel the deal adds significantly to the growth element for the stock. The addition also helps make Marvell solidly positioned in data center, cloud, enterprise, security and 5G.

The company has cleared the final hurdle to acquire Cavium, as it received the necessary approval from China’s State Administration for Market Regulation. The company expects to complete the merger this month, but the trade issues need to be watched.

Shareholders receive a 1.11% dividend. The Merrill Lynch price target is $28. The consensus price objective is $27.85, and shares closed on Friday at $21.63.

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These four quality stocks for one reason or another have underperformed the market this year. All offer serious upside potential and, best of all, perhaps very limited downside risk. While they are not suitable for super-conservative accounts, growth investors with a long time horizon could do well owning any of them at current levels.

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