While the Santa Claus rally has been a nice end of the year gift, albeit with some selling yesterday, it has added to the already healthy gains for 2020. All three major indexes have hit all-time highs, as has the Russell 2000, so investors should consider making some changes now. While Wall Street is generally positive on the prospects for next year, and Goldman Sachs just raised the firm’s gross domestic product target for the first quarter to 5%, it is very possible a sizable correction could be on the way.

For many, raising some cash now and selling into strength makes a lot of sense. For those wanting to stay close to fully invested, it makes sense now to shift to some contrarian stocks that could end up being solid 2021 ideas. We screened the BofA Securities research universe looking for companies that have been out of favor or those in sectors that are, and we found five that pay solid and dependable dividends.

While all are indeed 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.

The third-quarter results showed solid subscriber growth in the company’s market focus areas of wireless and fiber broadband, while continuing to reflect strong cash flows, financial strength and business resiliency. AT&T also updated guidance and now expects 2020 free cash flow of $26 billion or higher, with a dividend payout ratio with a percentage in the high 50s.

AT&T also is currently accepting bids for the firm’s DirecTV stake, and while it will be a big loss, it will help the firm continue to cut expenses.

Investors receive a 7.29% dividend. BofA Securities has a $36 price target for the shares, and the Wall Street consensus target is $31.14. AT&T stock closed trading on Tuesday at $28.54.

This is definitely a contrarian play, and it makes sense for investors looking for energy exposure. Baker Hughes Co. (NYSE: BKR) is an international industrial service company and one of the world’s largest oil field services companies. It provides the oil and gas industry with products and services for oil drilling, formation evaluation, completion, production and reservoir consulting.

Baker Hughes prides itself on being a self-described energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and with operations in over 120 countries, the firm’s innovative technologies and services are taking energy forward.

Investors in Baker Hughes stock receive a 3.47% dividend. The $25 BofA Securities price target compares with a $22.81 consensus and a Tuesday closing print of $20.75.

Cisco

This mega-cap tech leader is a smart play for more conservative investors looking to own technology. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.

It provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.

Cisco’s cybersecurity products give clients the scope, scale and capabilities to keep up with the complexity and volume of threats. Putting security above everything helps corporations innovate while keeping their assets safe.

The company reported in-line revenues for the most recent quarter, but the disappointing guidance caused some sellers to come in. Many on Wall Street remain positive as 5G, 400G, optical and WiFi 6 are expected to drive 2021 growth.

Shareholders receive a 3.23% dividend. The BofA Securities target price is $50, which is above the $48.62 consensus target. Cisco Systems stock closed at $44.64 on Tuesday.

This is the largest publicly traded energy partnership and a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) provides a wide variety of midstream energy services, including gathering, processing, transportation and storage of natural gas, natural gas liquids fractionation, import and export terminaling, and offshore production platform services.

Enterprise Products Partners and Navigator Holdings recently announced that service has begun on a new 30,000-ton refrigerated ethylene storage tank at the ethylene export terminal, which is owned 50/50 by affiliates of the two companies. Navigator Atlas, a 21,000 cubic meter ethylene gas carrier, became the first vessel to utilize the new service when it was loaded at the facility located in Morgan’s Point, Texas on December 23, 2020. The tank will facilitate faster loading, increasing efficiency for the terminal’s customers and enabling the terminal to reach an annual nameplate export capacity of a million tons per year.

Investors receive a 9.05% distribution. The BofA Securities price target is set at $24. The posted consensus target is higher at $25.16. Enterprise Products Partners stock ended Tuesday’s trading at $19.67.

Lockheed Martin

This is one of the top aerospace and defense stocks to buy, and many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending in 2021. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates and sustains advanced technology systems, products and services. It also provides a wide range of defense electronics products and IT services.

Being the Pentagon’s prime contractor, Lockheed Martin offers a diverse portfolio of global aerospace, defense, security and advanced technologies. Its leveraged presence in the Army, Air Force, Navy and IT programs guarantees a steady inflow of follow-on orders, not only from the U.S. government but also from many foreign allies of the nation.

Over the past several years, Lockheed Martin’s backlog has substantially outgrown the rest of the industry, supporting the growth outlook for the foreseeable future. The company has exposure to U.S. Department of Defense priority buckets and consistently executes well. Even if the end-market growth rate slows, many on Wall Street expect continued strong fundamentals, with compounding earnings and cash flows.

Investors receive a 2.94% dividend. The BofA Securities price objective is a stunning $500. The consensus target is $436. Lockheed Martin stock closed most recently at $353.90.

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These five top stocks have been somewhat out of favor in 2020 but offer patient investors looking for value very promising upside to the posted price targets. In addition, with all paying dependable dividends, the total return potential for 2021 looks outstanding as investors are paid to wait for the stocks to move higher.

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