September is doing what September often does, and the Robinhood traders who are long out of the money call options, and stocks they bought on margin are getting clipped pretty well. While September is often a volatile month, this year investors have been tagged with a witches’ brew of COVID-19, a bitter election fight, social unrest across the nation, stocks that are way overbought after a long rally and countless other issues.

The question for many investors is what to do now. Going to cash that pays nothing seems like a bad idea, and Treasury yields are at record lows, with prices all above par across the curve. What may make sense is to hunker down in safe dividend-paying stocks of companies with products that will not go out of demand, at least until the election is settled and we see a clear path forward.

We screened the entire BofA Securities research universe looking for safe stock ideas that pay dependable dividends and are rated Buy. We found five that nervous investors should rotate to now to wait out the coming political and geopolitical fireworks that could be on tap over the rest of the year.

While they all are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

AT&T

This is a top telecom and entertainment play. AT&T Inc. (NYSE: T) is the largest U.S. telecom company and provides wireless and wireline service to retail, enterprise and wholesale customers. The company’s wireless network serves approximately 124 million mobile connections, with 77 million postpaid subscribers.

While AT&T’s traditional wireline voice business has undergone a period of secular decline due to wireless substitution and cable competition, the company through WarnerMedia has become a diversified media and entertainment business.

WarnerMedia’s second-quarter 2020 operating revenue was $6.8 billion, down 22.9% year over year, with segment operating income contribution of $1.9 billion, down 18.4% from the year-ago quarter. AT&T estimated COVID-19 was responsible for $1.5 billion in lower sales at WarnerMedia. Turner’s advertising revenue plummeted 37%, to $796 million in the most recent quarter.

Investors receive a probably secure 7.46% dividend. BofA Securities has a $36 price target for the shares, and the Wall Street consensus target is $32.31. AT&T stock closed trading on Thursday at $28.04.

Bristol-Myers Squibb

This remains a solid pharmaceutical stock to own long term, and it is on the BofA Securities US 1 list. Bristol-Myers Squibb Co. (NYSE: BMY) is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.

The company reported strong second-quarter results that were largely ahead of Wall Street consensus, given the ongoing recognition of Celgene revenue. Bristol-Myers bought Celgene last year in a massive $74 billion acquisition. The posted quarterly earnings of $1.63 per share exceeded the Wall Street consensus estimate and were higher than the per-share earnings reported in the same period a year ago.

Shareholders receive a 3.05% dividend. The BofA Securities price target is $80, while the consensus target is $73.50. Bristol-Myers stock closed trading at $58.25 on Thursday.

Consolidated Edison

This old-school stock offers investors the stability and track record many seek now. Consolidated Edison Inc. (NYSE: ED) offers electric services to approximately 3.5 million customers in New York City and Westchester County; gas to around 1.1 million customers in Manhattan, the Bronx and parts of Queens and Westchester County; and steam to about 1,700 customers in parts of Manhattan.

Consolidated Edison owns 62 area distribution substations and various distribution facilities; 39 transmission substations and 62 area stations; electric generation facilities with an aggregate capacity of 724 megawatts that run on gas and fuel oil; 4,348 miles of mains and 369,791 service lines for natural gas distribution; and one steam-electric generating station and five steam-only generating stations.

The company operates 572 circuit miles of transmission lines; 14 transmission substations; 86,794 in-service line transformers; 3,994 pole miles of overhead distribution lines; and 1,889 miles of underground distribution lines, as well as 1,867 miles of mains and 105,482 service lines for natural gas distribution. In addition, it is involved in the sale and related hedging of electricity to retail customers, and the provision of energy-related products and services to wholesale and retail customers.

Holders of Consolidated Edison stock receive a safe 4.17% dividend. The $78 BofA Securities price target is close to the $77.53 consensus target. The shares closed most recently at $73.93.

McDonald’s

The fast-food giant continues to revamp both stores and the menu, and it is a solid pick for more conservative accounts. McDonald’s Corp. (NYSE: MCD) is the world’s leading global food-service retailer with over 37,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local businesspersons.

Wall Street September checks of the fast-food giant suggest trends are on pace to be sequentially higher, driven in part by upcoming promotions including Spicy McNuggets and the Travis Scott Meal promotion. Operators also indicated that the company’s breakfast sales, which were slammed hard amid pandemic shutdowns and the work-from-home trend, have seen some very solid improvement. McDonald’s has one of the best fast-food breakfast menus.

McDonald’s looks to be on track to beat third-quarter same-store sales estimates, and many are now modeling for the company to report comparison growth of 5.0% for the quarter, up from 3.5% previously. In fact, comps were up about 5% in the final 10 days of August, climbing to the high-single digits in early September. That figure jumped to more than 10% from Sept. 8 on, an acceleration attributed to the introduction of the Travis Scott Meal, which drove an estimated 400 to 500 basis point lift to same-store sales. Travis Scott is a popular American rap star, and his quarter pounder meal is selling out in markets across the nation.

The dividend yield is 2.35%. BofA Securities has set a $225 price target. The consensus target is $220.77, and McDonald’s stock was last seen trading at $216.12.

PepsiCo

This top consumer staples stock fits the bill for worried investors. PepsiCo Inc. (NYSE: PEP) operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay’s and Ruffles potato chips; Doritos, Tostitos and Santitas tortilla chips; and Cheetos cheese-flavored snacks, branded dips and Fritos corn chips.

The Quaker Foods North America segment provides Quaker oatmeal, grits, rice cakes, natural granola and oat squares, as well as the soon to be changed Aunt Jemima mixes and syrups, and Quaker Chewy granola bars, Cap’n Crunch cereal, Life cereal and Rice-A-Roni side dishes.

Pepsi’s North America Beverages segment offers beverage concentrates, fountain syrups and finished goods under the Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, Tropicana Pure Premium, Sierra Mist and Mug brands, as well as ready-to-drink tea and coffee, and juices. It is one of the companies that helped Americans survive the pandemic.

Shareholders receive a 3.15% dividend. The BofA Securities price target is $150. The consensus target is $146.59, and PepsiCo stock closed at $131.58.

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The recent selling should come as no surprise to investors. The massive rally that exploded off the March lows pushed many of the stock indexes to all-time highs, all while a pandemic was going on and much of the U.S. economy was shut down. While 2021 should prove to be a much better year, both economically and psychologically, with a resolution of the election and hopefully a COVID-19 vaccine, we still have to get there intact. Playing it safe with conservative dividend stocks is a solid way to go now.

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