All the Wall Street firms that we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the companies they not only like on a longer term basis, but stocks that usually have big upside to the assigned target price. With the fourth quarter more than half over, many firms have tweaked their lists of top stocks to buy to account for continued changes in the rest of the year and into 2022.
We screened the Jefferies Franchise Picks, looking for the companies that pay solid dividends and also are strong plays in a very inflationary world. These stocks make good sense for growth stock investors looking to add a dividend kicker to increase total return potential. Remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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Blackstone
Shares of this top money management company make sense for more aggressive growth and income investors. Blackstone Group L.P. (NYSE: BX) is one of the largest global alternative asset managers. Blackstone manages investments and provides services across four operating segments: Private Equity, Real Estate, Credit and Hedge Fund Solutions.
Blackstone also launches and manages private equity funds, real estate funds, funds of hedge funds and credit-focused funds for its clients. It invests in private equity, public equity, fixed income and alternative investment markets.
Blackstone stock investors receive a 2.44% distribution. The Jefferies team has a $157 price target on the shares, while the analysts’ consensus target is $147.50. Shares closed on Friday at $146.44.
CVS Health
This top stock gapped up in early November but has come back in and offers a much better entry point. CVS Health Corp. (NYSE: CVS) is one of the largest health care companies in the United States, providing retail, mail and specialty pharmacy dispensing services and pharmacy benefits. CVS has become one of the most vertically integrated publicly traded health care companies.
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CVS serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans and individuals. This segment operates retail specialty pharmacy stores and specialty mail order, mail order dispensing, and compounding pharmacies, as well as branches for infusion and enteral nutrition services.
CVS completed a $69 billion purchase of health care provider Aetna in November of 2018 and remains one of the top picks for 2022 and beyond, as CVS has become one of the most vertically integrated publicly traded health care companies, and health care has lagged the S&P 500 significantly this year.
Investors receive a 2.15% dividend. The Jefferies price target of $90 is well above the $78.87 consensus target. CVS Health stock closed at $62.96 a share on Friday.
Extra Space Storage
This top real estate investment trust (REIT) is a safe way for investors to own the self-storage sector. Extra Space Storage Inc. (NYSE: EXR) is a fully integrated, self-administered and self-managed REIT headquartered in Salt Lake City, Utah.
Like many self-storage companies, Extra Space offers rentable storage space offering customers conveniently located and secure storage units across the country, including boat storage, recreational vehicle storage and business storage.
At the beginning of 2021, the company owned or operated 1,971 self-storage stores in 40 states, the District of Columbia and Puerto Rico. The portfolio consists of approximately 149.2 million square feet of rentable space and 1.4 million units, making the company the second-largest owner/operator of self-storage stores and the largest self-storage management company in the country.
Investors receive a 2.47% distribution. Jefferies price target for Extra Space Storage stock is $225. The consensus target is just $209.57, and the shares ended Friday trading at $202.16 apiece.
Freeport-McMoRan
This is one of the top picks across Wall Street in its sector and an outside way to play the electric vehicle trend. Freeport-McMoRan Inc. (NYSE: FCX) is the world’s largest publicly traded copper and moly producer, as well as the eighth largest gold producer. Its key operating and development assets are in Indonesia, North America, South America and Africa.
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Highly leveraged toward copper mining, the company could be a big player in a scenario of rebuilding and repairing old and battered projects, and it clearly would benefit from stronger demand and higher prices for industrial commodities.
Trafigura’s Chief Economist Sadd Rahim recently told analysts that he remains bullish on the current commodity cycle and sees room for significant further upside potential to commodity prices over the next one to three years. In particular, this is due to accelerating demand growth, excluding China and supply constraints. He believes that this cycle is in the very early stages, as key demand drivers, such as pent-up consumer demand, accelerating global capital expenditures and massive stimulus in the United States, have yet to fully kick in.
Investors receive just a 0.68% dividend. Jefferies has set its price target at $55. The posted consensus target for Freeport-McMoRan stock is $42.33. The shares were last seen on Friday trading at $38.28 apiece.
Gilead Sciences
This stock is trading a very reasonable 9.53 times estimated 2021 earnings and has big-time upside potential. Gilead Sciences Inc. (NASDAQ: GILD) is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in the areas of unmet medical need in the United States, Europe and elsewhere.
The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/Eviplera, Stribild and Atripla products for the treatment of human immunodeficiency virus (HIV) infection; Veklury, an injection for intravenous use, for the treatment of coronavirus disease 2019; and Epclusa, Harvoni, Vosevi, Vemlidy and Viread for the treatment of liver diseases. It also offers Yescarta, Tecartus, Trodelvy and Zydelig products for the treatment of hematology, oncology and cell therapy patients.
In addition, Gilead provides Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; Ranexa, an oral formulation for the treatment of chronic angina; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections. Gilead Sciences has collaboration agreements with Arcus Biosciences, Pionyr, Tizona, Tango Therapeutics, Jounce Therapeutics, Galapagos, Janssen, Japan Tobacco, Gadeta, Bristol-Myers Squibb, Merck and Novo Nordisk.
A 4.13% dividend is one reason Jefferies analysts have loved this name for some time. Their $80 price objective on Gilead Sciences stock compares with the $76.45 consensus target and Friday’s closing print of $68.69.
Financial services, a top REIT, health care that has lagged dramatically and one of the biggest gold and copper miners in the world, all of which tend to feel little if any pressure for rising inflation. Given the massive run-up in the market, taking profits on momentum and high-flyers might be a good idea now while using the proceeds to shift to these five top companies.
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