The rally since June has been welcome, as investors were hammered down into bear market territory for the first half of the year. Yet, with a recession bearing down, more interest rate hikes on the horizon and white-hot inflation still torturing consumers, especially at the gas pump and the grocery store, the prospects going forward do not look particularly good.
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So now, weary stock investors feel trapped as they see the meme stock retail army making money again on short-squeeze candidates, and they are paralyzed by the FOMO (fear of missing out) conundrum. The facts are that the summer surge higher likely has been a bear market rally, which often can be huge, and the smart move now is to take profits and grab large-cap dividend stocks that are on sale.

We screened our S&P 500 equity research database looking for companies offering the biggest and most dependable dividends, those with Buy-rated stocks that have very solid total return potential. Seven companies look like outstanding ideas for concerned investors.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Altria

This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.

Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In 2008, it spun off its international cigarette business to shareholders. The stock was pounded recently, as last month the U.S. Food and Drug Administration announced the ban of all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is focused on selling its nicotine products to teenagers. A court has granted Juul’s request for a stay on the ban, allowing the company to still sell the products while an appeal is made on the decision.

While this gets sorted out, it is a good bet that investors will still receive a giant 7.95% dividend. Deutsche Bank has a $46 target price on Altria stock. The consensus target is higher at $49.34, and shares closed on Wednesday at $45.45.

AT&T

The legacy telecommunications company has been going through a long restructuring, has lowered its dividend and has sold off or merged underperforming assets. AT&T Inc. (NYSE: T) provides telecommunications, media and technology services worldwide.
AT&T’s Communications segment offers wireless voice and data communications services and sells handsets, wireless data cards, wireless computing devices with carrying cases and hands-free devices through its own company-owned stores, agents and third-party retail stores.
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The company also provides data, voice, security, cloud solutions, outsourcing and managed and professional services, as well as customer premises equipment for multinational corporations, small and midsized businesses, and governmental and wholesale customers. In addition, it offers broadband fiber and legacy telephony voice communication services to residential customers.

The company markets its communications services and products under the AT&T, Cricket, AT&T Prepaid and AT&T Fiber brand names. The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brand names.

AT&T stock investors receive a 6.00% dividend. The Goldman Sachs price objective is $23, and the consensus target is $21.93. The stock ended Wednesday trading at $18.42 a share.

Devon Energy

This may be one of the best value propositions in its sector, as it uses a variable dividend strategy. Devon Energy Corp. (NYSE: DVN) is an independent energy company that primarily engages in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs) in the United States and Canada. It operates approximately 19,000 wells.

The company also offers midstream energy services, including gathering, transmission, processing, fractionation and marketing to producers of natural gas, NGLs, crude oil and condensate through its natural gas pipelines, plants and treatment facilities.

Production is weighted toward crude oil while growth opportunities are liquids focused, anchored by the Delaware Basin, SCOOP/STACK, Eagle Ford Shale, Canadian Oil Sands, and the Barnett. Devon also owns equity in the publicly traded midstream master limited partnership (MLP) EnLink.

Shareholders receive a 7.75% dividend. The target price at Truist Financial is $115. The consensus target for Devon Energy stock is $77.53, and shares closed on Wednesday at $64.14.

ONEOK

The solid price of natural gas over the past year has helped to lift this top energy company. ONEOK Inc. (NYSE: OKE) primarily engages in natural gas transportation, storage and natural gas and NGLs gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying MLP, ONEOK Partners.
ONEOK has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which analysts feel provides high-return growth opportunities.
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Many on Wall Street remain quite positive on ONEOK’s primarily fee-based earnings, which account for 90% of total earnings.

Investors receive a 5.91% dividend. The $75 Raymond James price target compares with a $69.25 consensus target. ONEOK stock closed on Wednesday at $62.96.

Pioneer Natural Resources

Many Wall Street analysts love this stock as a pure crude oil play and, the company also is looking to employ variable dividends. Pioneer Natural Resources Co. (NYSE: PXD) operates as an independent oil and gas E&P company in the United States.

The company explores for, develops and produces oil, NGLs and natural gas. It has operations in the Midland Basin in West Texas. As of December 31, 2021, the company had proved undeveloped reserves and proved developed non-producing reserves of 130 million barrels of oil, 92 million barrels of NGLs and 462 billion cubic feet of gas, and it owned interests in 11 gas processing plants.

Pioneer production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.

Pioneer is a huge player in the Permian basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian, as it expects to deliver solid production growth in 2022 and beyond.

Investors are paid a stellar 8.88% dividend, which may vary from quarter to quarter. The next dividend of $8.57 will be paid on Sept. 16 to owners of record on Sept. 6. Piper Sandler has set a $339 target price, while the consensus target is lower at $291.74. The final Pioneer Natural Resources stock trade on Wednesday was reported at $232.50.

Simon Property

Shares of this leading company have been pounded and are offering the best entry point since last year. Simon Property Group Inc. (NYSE: SPG) is a very strong company for investors looking to play the industry. It invests in real estate markets across the globe. It engages in investment, ownership, management and development of properties. The company primarily invests in regional malls, premium outlets, mills and community/lifestyle centers to create its portfolio.
Through its subsidiary partnership, Simon Property owns or has an interest in about 230 properties in the United States and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

Simon Property stock comes with a 6.11% distribution. Morgan Stanley’s price target of $133 is well above the $126.40 consensus target and the most recent close at $112.84.
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Vornado Realty Trust

Sporting a sizable dividend and offering investors a great inflation-hedging real estate play, this top stock is an incredible buy now. The Vornado Realty Trust (NYSE: VNO) portfolio is concentrated in the nation’s key market New York City, along with additional premier assets in both Chicago and San Francisco. It is the real estate industry leader in sustainability policy, owning and managing over 23 million square feet of LEED-certified buildings.

The company posted very solid results last week, as funds from operations (FFO) and revenues beat Wall Street estimates. Another very positive metric for the company was that, on a year-over-year basis, FFO per share and revenues grew 20.3% and 19.7%, respectively.

Investors receive a 6.98% distribution. The target price for Vornado Realty Trust stock at Truist Financial is $34. The consensus target is $31.80, and shares closed at $29.54 on Wednesday.

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These are seven of the top S&P 500 stocks, and all offer investors outstanding entry points, the biggest dividends in the venerable index, Buy ratings at top Wall Street firms, and a reasonably strong moat around their businesses.

We are in one of the worst economic periods in America in decades. Profligate government spending, combined with a Federal Reserve that never saw the wave of inflation coming until it was too late (and even admitted it) and now is forced to raise interest rates at a historical pace. With that in mind, buying stocks that will pay dependable dividends until this mess is sorted out makes total sense now.

Note that Devon and Pioneer Natural Resources use variable dividend programs, so it is very possible their big dividends could be lower at some juncture. The other five will pay consistent and, in most cases, well above-average dividend yields that are very dependable.

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