With earnings reports for the fourth quarter all but over, and the second quarter of 2019 well underway, many of the top companies we follow on Wall Street are making some changes to the lists of their high-conviction stock picks for clients. With the market starting to show some volatility, it makes sense to examine the lists and make some changes, as the rest of the year could have increasing volatility as the political and geopolitical cycle could prove to be very explosive component.

We regularly watch the Merrill Lynch US 1 list of top stock recommendations for changes, and while no new companies were added this week, we did note that some on the list tend to lean to the more conservative side, and with good reason. Despite the big first-quarter rally, many investors, both large and small, have been selling the strength, so it makes sense to look for low volatility and stocks that pay reliable dividends.

We found five companies on the US 1 list that offer a degree of safety and reliable dividends.

AT&T

This stock has been absolutely hammered and has returned the Merrill Lynch US 1 list. 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.

This telecom giant also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions. Trading at a very cheap 9.4 times estimated 2019 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.

The company’s fourth-quarter revenue of $47.99 billion fell short of analyst estimates. AT&T also reported net additions of 134,000 phone subscribers, well below analyst estimates of 308,000. The company also lost 403,000 satellite TV subscribers and 14% of its DirecTV Now streaming subscribers in the quarter.

AT&T shareholders are paid a rich 6.56% dividend. Merrill Lynch has a $37 price target for the shares, which compares with the Wall Street consensus last seen at $35.36. The stock closed trading on Thursday at $31.12 a share.

BB&T

The Merrill Lynch bank team has remained very positive on this company, and the stock was added to the US 1 list last week. BB&T Corp. (NYSE: BBT) is a Winston-Salem, North Carolina–based financial services company with more than $200 billion in assets. With a history dating back to the Civil War, it is currently the ninth largest bank in the United States by deposits and sixth largest by number of branches.

Building on a long tradition of excellence in community banking, BB&T offers a wide range of financial services including retail and commercial banking, investments, insurance, wealth management, asset management, mortgage, corporate banking, capital markets and specialized lending. The company operates over 2,100 financial centers in 15 states and Washington, D.C.

The recent announcement of the merger between BB&T and SunTrust took Wall Street by storm, and when completed it will make the combined company the sixth largest U.S. bank.

BB&T investors are paid a solid 3.18% dividend. Merrill Lynch has a price target of $58 for the shares, while the posted consensus target price is $55.51. The shares closed Thursday’s trading at $50.97 apiece.

Merck

This remains a leading health care stock pick for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.

The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.

Shareholders of Merck are paid a 2.71% dividend. The $88 Merrill Lynch price target is above the posted consensus target of $83.02. The stock closed trading at $81.29 per share on Thursday.

Procter & Gamble

The stock offers a very solid dividend and safety. Procter & Gamble Co. (NYSE: PG) is another solid consumer staples stock for conservative investors to consider. It sells lots of very well-known household items that are essential for everyday life. Brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.

The company actually is innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends.

Procter & Gamble shareholders are paid a 2.87% dividend. The Merrill Lynch price objective is $110. The consensus target price was last seen at $97.38, and the stock closed most recently at $98.55.

Williams Companies

This top energy stock is also a solid pick for more conservative accounts. Williams Companies Inc. (NYSE: WMB) is now largely a pure-play domestic natural gas infrastructure company that has a 74% ownership interest in its underlying master limited partnership, Williams Partners.

The company has a lower risk, fee-based business model with some volume sensitivity. Natural gas demand continues to be driven by liquefied natural gas (LNG) exports, power generation and industrials. In addition to steady demand growth, Marcellus production and associated gas in the Permian are expected to continue to be primary supply drivers.

These shareholders are paid a very sizable 5.7% dividend. Merrill Lynch has set its price target at $30. The consensus across Wall Street is $31.94, and the stock closed Thursday at $26.69 a share.

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These five outstanding ideas from the US 1 team at Merrill Lynch are decidedly more conservative. Given their strong and consistent dividends, they offer investors excellent total return potential and a safer way to play the stock market in 2019.

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