24/7 Wall St. reviews dozens of analyst research reports each day of the week with a goal of finding new ideas for investors and traders alike. The calls seen in the past week show that analysts still favor tech stocks, even though the sector has soared in the past year but struggled lately.
Many of the recommendations this past week called for investors to consider stocks that pay solid dividends. Worries about the impact on the economy of the spread of the Delta coronavirus variant, rising inflation–is it temporary or permanent–and an end to the Fed’s easy money policy suggest that dividends may become an investor’s new best friend.
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Here are five top dividend-paying stocks that are solid choices.
KeyCorp
KeyCorp (NYSE: KEY | KEY Price Prediction) is a regional bank that serves individuals and small- and medium-sized businesses. The bank’s market cap is almost $19.5 billion and it beat earnings and revenue estimates handily when it reported quarterly results last month. Seven analysts rate the stock a Buy and nine give the shares a Hold rating. Last week, Morgan Stanley reiterated an Equal Weight rating and lowered its price target from $26 to $25 while RBC maintained an Outperform rating and raised its price target from $33 to $36.
The median target is $22 and the stock closed Friday at $20.33, implying a potential upside of around $10%. KeyCorp pays an annual dividend of $0.74 for a yield of 3.54%.
Regions Financial
In addition to its regional corporate and consumer banking services, Regions Financial Corp. (NYSE: RF) also offers wealth management services. The bank’s market cap is about $19.1 billion and, like KeyCorp, Regions beat on both the top and bottom lines when it reported second-quarter results last month. Morgan Stanley reiterated an Overweight rating but lowered its price target on the stock from $24 to $19.29 after the earnings report. Citigroup had initiated coverage before the report with a Hold rating and a price target of $19.29. The median price target is $23 and 12 of 25 analysts have a Buy or Strong Buy rating on the shares.
The stock closed Friday at $19.96, implying an upside potential of 15%. Regions pays an annual dividend of $0.64 per share for a yield of 3.18%.
AbbVie
Research-based biopharmaceutical giant AbbVie Inc. (NYSE: ABBV) beat analysts’ forecasts for both profits and revenues in the June quarter. The company’s market is around $202.2 billion and the stock posted a new 52-week high of $119.15 on July 30. That resulted in price target increases from four brokerages: Barclays, from 105 to $112; Mizuho, from $128 to $131; SVB Leerink, from $144 to $145; and Argus from $130 to $140. The median price target on the stock is $126 and 18 of 24 analysts have assigned a rating of Buy or Strong Buy on the stock.
Shares closed Friday at $114.45, implying an upside potential of around 10%. AbbVie pays an annual dividend of $5.20 per share for a yield of 4.54%.
Exxon Mobil
Integrated oil & gas giant Exxon Mobil Corp. (NYSE: XOM) sports a market cap of almost $245 billion. The company beat June-quarter forecasts on both the top and bottom lines, primarily due to higher prices for crude oil. Most analysts (18 of 28) give the stock a Hold rating while another nine rate the shares a Buy or Strong Buy. Following the earnings report, however, two brokers lowered their price targets and one downgraded the stock. DZ Bank dropped its rating from Buy to Hold and cut its price target from $67 to $62.50 while Credit Suisse kept its Hold rating and chopped its price target from $73 to $69.
The stock closed at $57.86 on Friday and the median price target is $66.50, implying an upside of nearly 15%. Exxon pays an annual dividend of $3.48 for a yield of 6.08%.
Chevron
The other supermajor U.S. integrated oil & gas giant, Chevron Corp. (NYSE: CVX), also reported top- and bottom-line results that beat expectations for the second quarter. The last remaining energy stock among the Dow 30, Chevron’s market cap is around $197.2 billion. Unlike Exxon, however, analysts’ ratings on the stock are more positive with 16 of 28 rating the shares a Buy or Strong Buy and the other 12 putting a Hold rating on the stock. Recent ratings include a downgrade from Buy to Hold at DZ Bank with a price target of $110. Raymond James rates the stock at Outperform and raised its price target from $120 to $125.
Shares closed Friday at $101.95, implying a potential upside of about 22.5% based on a median price target of $126. Chevron pays an annual dividend of $5.36 for a yield of 5.26%.
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