While we are likely not close to the bottom of the market, the good news is that we are slowly but surely grinding and getting closer. The jobs data from last Friday, and what is likely to be another sobering consumer price index report on Thursday, have all but guaranteed that we are in for yet another 75-basis-point rate hike when the Federal Reserve governors attend their next meeting in early November. The question for stock investors is what to do now.
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The temptation for many is to sift through the rubble and look for bargains, which are starting to really come to the surface with all the major indexes trading well into the down 20% bear market territory. However, the reality is that the market is teetering on the abyss and could be poised for another big move lower. It makes sense to look for bargains that pay big dividends and to start buying partial positions now and add as we trade down.

We screened our 24/7 Wall St. research database looking for blue chip names that are offering solid entry points and pay outstanding and dependable dividends. Many of these stocks have seen their dividends explode higher as the shares have hit 52-week lows. While all are rated Buy at top Wall Street firms, it is important to remember that no single analyst report should be used as the 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 March 2008, it spun off its international cigarette business. In December 2018 it acquired 35% of Juul Labs, but the stock was pounded this summer when the FDA announced a ban on all sales of Juul vape pens.

Altria has announced that it is looking to end its noncompete agreement with Juul to compete more aggressively in the vape space. The company is rolling out its own heated and vapor products, such as Marlboro HeatSticks and IQOS, both of which are slowly being expanded across the United States.

The company pays out an 8.78% dividend. Deutsche Bank has a $46 target price on Altria stock. The consensus target is even higher at $48.83. The shares traded on Tuesday at $44.80.

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.

Its 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.
AT&T 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.
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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.

Shareholders receive a 7.45% dividend. The Raymond James price objective is $26. and the consensus target is at $21.45. AT&T stock traded on Tuesday at $14.80.

Hess Midstream

This is the limited partnership midstream arm of one of the country’s top energy companies. Hess Midstream L.P. (NYSE: HESM) owns, develops, operates and acquires midstream assets. The company operates through three segments.

The Gathering segment owns natural gas gathering and crude oil gathering systems, as well as produced water gathering and disposal facilities. Its gathering system consists of approximately 1,350 miles of high and low pressure natural gas and natural gas liquids gathering pipelines with capacity of approximately 450 million cubic feet per day, and the crude oil gathering system comprises approximately 550 miles of crude oil gathering pipelines.

The Processing and Storage segment comprises Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota; a 50% interest in the Little Missouri 4 gas processing plant located in south of the Missouri River in McKenzie County, North Dakota; and Mentor Storage Terminal, a propane storage cavern and rail, and truck loading and unloading facility located in Mentor, Minnesota.

The Terminaling and Export segment owns Ramberg terminal facility; Tioga rail terminal; and crude oil rail cars, as well as Johnson’s Corner Header System, a crude oil pipeline header system.

Investors receive an 8.15% distribution. The Goldman Sachs team has a price target of $40, well above the $34.50 consensus target for Hess Midstream stock. Shares traded at $26.05 on Tuesday.

New York Community Bancorp

This somewhat off-the-radar company pays a huge dividend and is an attractive idea for investors also looking to own financials now. New York Community Bancorp Inc. (NYSE: NYCB) operates as the bank holding company for New York Community Bank, which provides banking products and services in New York, New Jersey, Ohio, Florida and Arizona.

The company accepts various deposit products, such as interest-bearing checking and money market, savings, non-interest-bearing and individual retirement accounts, as well as certificates of deposit. Its loan products include multifamily loans; commercial real estate loans; specialty finance loans and leases; and commercial and industrial loans; acquisition, development and construction loans; one-to-four family loans; and consumer loans.
The company also offers annuities, life and long-term care insurance products and mutual funds; cash management products; and online, mobile and phone banking services. It primarily serves individuals, small and midsize businesses, and professional associations through a network of 237 community bank branches and 340 ATM locations.

New York Community Bancorp stock comes with an 8.08% dividend. BofA Securities has the only Buy rating on Wall Street. The firm’s $11 price target compares with the $11.36 consensus target and a share price of $8.40 seen on Monday.
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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 exploration and production company in the United States.

The company explores for, develops and produces oil, natural gas liquids (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.

Its 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 going forward.

The 7.92% dividend may vary from quarter to quarter. The $309 Barclays target price is higher than the $299.53 consensus estimate. Pioneer Natural Resources stock traded at $249.60 on Tuesday.

Prudential Financial

This is a top financial services and insurance company, and only one Wall Street firm has a Buy rating on the shares. Prudential Financial Inc. (NYSE: PRU) provides insurance, investment management and other financial products and services in the United States and internationally.

The company offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. It also provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; and group life, long-term and short-term group disability, and group corporate-, bank- and trust-owned life insurance in the United States, primarily to institutional clients for use in connection with employee and membership benefits plans. It also sells accidental death and dismemberment, and other supplemental health solutions, and it provides plan administration services in connection with its insurance coverages.
In addition, Prudential Financial develops and distributes individual variable and fixed annuity products, principally to the mass affluent and affluent markets, and individual variable, term and universal life insurance products to the mass middle, mass affluent and affluent markets in the United States. Further, it provides third-party life, health, Medicare, property and casualty, and term life products to retail shoppers through its digital and independent agent channels. The company offers its products and services to individual and institutional customers through its proprietary and third-party distribution networks.
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The dividend yield here is 5.27%. Raymond James recently initiated coverage on Prudential Financial stock with a Strong Buy rating. Its $115 price target compares with a $102.20 consensus target and a recent share price of $90.10.

Vale

This very solid commodity play is one of the best ideas during a recession. Vale S.A. (NYSE: VALE) produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally.

The company operates through Ferrous Minerals and Base Metals segments. The former segment produces and extracts iron ore and pellets, manganese, ferroalloys and other ferrous products, as well as providing related logistic services. The latter segment produces and extracts nickel and its by-products, such as gold, silver, cobalt, precious metals and others, as well as copper.

Last week, the company confirmed it has hired advisors to assess “long term value-unlocking alternatives,” after the Financial Times reported the company was looking to sell a stake in its metals business. Vale added in a securities filing, however, that no decision has been reached yet on any potential transaction. Financial Times also reported that Vale was in talks to sell a $2.5 billion minority stake in its metals business, citing people familiar with the matter.

Shareholders receive a 9.79% dividend. Vale stock has a $16 target price at Royal Bank of Canada. The consensus target is $17.40, and on Tuesday shares traded at $13.90 apiece.

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Seven top companies that for a variety of reasons are trading incredibly cheap and offering investors very timely entry points. With that noted, it still may be very prudent to just start with buying partial positions as the market still has a plethora of issues to deal with, not the least of which is the ongoing inflation burden and a continued rise in interest rates.

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