It seems hard to believe, but the third quarter is almost over and only one quarter remains in 2021. Now is the time when many investors will be reviewing their portfolios and making changes for the final 12 weeks of the year and into 2022. One thing is looking ever more likely. In November, the Federal Reserve will start tapering its quantitative easing of $120 billion per month of asset purchases. While the Fed has made its intentions very clear regarding this, that does not mean some added volatility won’t be part of the mix as we the end of the year approaches.
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It makes sense now for investors to move from the momentum and meme stocks to more conservative large-cap stocks that pay dividends. We screened the Dow Jones industrials looking for the highest-yielding companies in sectors that look to benefit from the continued reopening of the country and the economy. All these stocks are rated Buy at major Wall Street firms. It is important to remember though that no single analyst report should be used as a sole basis for any buying or selling decision.

Chevron

This energy giant is a solid way for investors who are more conservative to be positioned in the sector. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company, with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. The company sports a sizable dividend, and it has a solid place in the sector when it comes to natural gas and liquefied natural gas (LNG).

With the strongest financial base of the majors, coupled with an attractive relative asset base, many on Wall Street feel that Chevron offers the most straightforwardly positive risk/reward. Although current conditions do not warrant a large focus on production growth, Chevron possesses numerous medium-term drivers that should support production levels in the coming years.

Analysts feel comfortable that the 5.21% dividend will remain at current levels. The BofA Securities price target for Chevron stock is $130, while the consensus target is just $120.33. Monday’s final trade was reported at $102.97 per share.

This remains a top Warren Buffet holding and offers not only safety but also an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
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Led by Coca-Cola, one of the world’s most valuable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Coca-Cola stock investors receive a 3.13% dividend. BofA Securities has a $60 price target, which is slightly higher than the $59.53 consensus target. The shares closed on Monday at $53.61.

Dow

This stock offers investors growth and income potential. Dow Inc. (NYSE: DOW) is a leading materials science company and was formed from the merger of Dow and DuPont in 2017 and the subsequent spin-off 2019. The company is organized into three principal divisions: Performance Materials & Coatings (23% of EBITDA), Industrial Intermediates & Infrastructure (27%) and Packaging & Specialty Plastics (51%).

Dow’s segments include Agricultural Sciences, which is engaged in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils. Consumer Solutions consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses.

The Infrastructure Solutions segment consists of Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers and Infrastructure Solutions-Silicones businesses. Performance Materials & Chemicals consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses. The Performance Plastics unit consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses.

Investors receive a 4.69% dividend. Piper Sandler recently started coverage on the chemical giant, and its $78 price objective is well above the consensus figure of $66.40. Monday’s closing share price for Dow stock was $59.69, which was up over 5% on the day.

This old-school tech giant still offers investors a very solid entry point. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of information technology (IT) hardware, business and IT services, and a full suite of software solutions.
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The company integrates its hardware products with its software and services offerings in order to provide high-value solutions. Analysts have cited the company’s potential in the public cloud as a reason for their positive outlook going forward.

The company’s CEO Ginni Rometty, who had been in the position since 2012, stepped down in January, and the stock market greeted the news in a very positive manner. Arvind Krishna, who has led the company’s cloud computing business, was named the new chief executive. Rometty will remain as executive board chair until the end of the year.

The company pays out a 4.73% dividend. The $176 BofA Securities price target compares with a consensus target for IBM stock of $143.82. The shares closed at $138.56 on Monday.

Merck

This remains a leading health care stock 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 receive a 3.54% dividend. JPMorgan has set a $100 price target on Merck stock. The consensus price target is $93.29, and the shares were last seen trading on at $73.36 apiece.

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Five top Dow Jones industrial stocks still offer good entry points and pay dependable dividends. While the quantitative easing tapering will begin in November, it is highly unlikely the Fed actually will raise interest rates until 2023, so buying blue-chip stocks with solid total return potential remains a prudent investment choice for the rest of 2021 and beyond.

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