In a logical world, one would think, with the Federal Reserve raising interest rates all year long, that rates across the entire Treasury yield curve would head higher. In fact, just the opposite has occurred. Since the beginning of October, the yield on the benchmark 10-year note has dropped from 4.23% to 3.69%. During the same period, the 30-year long bond’s yield plummeted from 4.38% to 3.86%. In fact, with federal funds now at 3.75% to 4.00%, the 10-year and 30-year Treasury securities are trading at or below that rate.

Why is this happening? The reasons are numerous, but the biggest one is that the bond market senses that a recession, if not here now (despite the empirical data that says it is), certainly is on the way, and it could be very ugly. So what are income investors to do? Look for quality stocks that can survive in a turbulent market and that pay big dividends.

We screened our 24/7 Wall St. research database for quality blue-chip stocks offering solid upside potential and dependable dividends. All are rated Buy across Wall Street as well. It is important to remember though 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 March 2008, it spun off its international cigarette business. In December 2018 it acquired 35% of Juul Labs, but the stock was pounded last summer when the FDA announced a ban on all sales of Juul vape pens.

In October, the company, which at the height of its popularity dominated the market with its sweet flavors, agreed to pay $438.5 million in a settlement with 33 states and one territory over marketing its Juul product to teens. Altria announced recently that it is looking to end its noncompete agreement with Juul to compete more aggressively in the vape space on its own.

While this finally gets sorted out, it is a good bet that investors still will receive the 8.61% dividend. Stifel has a $50 target price on Altria stock. The consensus target is $48.73, and shares closed on Wednesday at $43.58.

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 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 5.85% dividend. Raymond James’s $24 price objective accompanies a Strong Buy rating. The consensus target is $20.28, and shares closed on Wednesday at $18.93.

Coterra Energy

This company was formed by the closing of the $17 billion merger of Cabot Oil & Gas and Cimarex Energy in 2021. Coterra Energy Inc. (NASDAQ: CTRA) is an independent oil and gas company engaged in the development, exploration and production of oil, natural gas and natural gas liquids (NGLs) in the United States. It primarily focuses on the Marcellus Shale, with approximately 177,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania.

The company also holds Permian Basin properties with approximately 306,000 net acres and Anadarko Basin properties located in Oklahoma with approximately 182,000 net acres. In addition, it operates natural gas and saltwater disposal gathering systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies and power generation facilities.

As of December 31, 2021, it had proved reserves of approximately 2,892,582 thousand barrels of oil equivalent, which include 189,429 thousand barrels of oil and other liquid hydrocarbons, 14,895 billion cubic feet of natural gas and 220,615 thousand barrels of natural gas liquids.

Shareholders receive an 8.95% dividend. The Stifel target price is $40. The consensus target for Coterra Energy stock is lower at $36.21. Shares pulled back 5% on Wednesday to $26.42 on no news we could source.

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.
The company 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.

Many on Wall Street remain positive on the company’s primarily fee-based earnings, which account for 90% of total earnings.

The dividend yield here is 5.73%. The $65 Raymond James price target is less than the $67.76 consensus target, and ONEOK stock closed on Wednesday at $64.71.

Simon Property

Shares of this leading company have been pounded and are offering the best entry point since last year, and it is a strong idea for investors looking to play the commercial real estate subsector. Simon Property Group Inc. (NYSE: SPG) invests in real estate markets across the globe, engaging 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 real estate investment trust with over 260 shopping centers in 13 countries.

Simon Property Group stock comes with a 6% distribution. Morgan Stanley team has set a $131 price target, while the consensus target is $125.63. The shares closed almost 4% lower on Thursday at $115.59.

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.

The company recently 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.

Investors enjoy an 8.93% dividend. Vale stock has a $16 target price at BMO Capital Markets. The consensus target is $17.19, and Wednesday’s was at $15.22.

This top telecommunications company offers tremendous value and passive income at current levels. Verizon Communications Inc. (NYSE: VZ) is one of the largest U.S. telecom companies. It provides wireless and wireline service to retail, enterprise and wholesale customers.

The company’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Its wireline business has undergone a period of secular decline due to wireless substitution and cable competition.

Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

Shareholders receive a 6.92% dividend. Cowen has a $55 target price, well above the $45.30 consensus target. Verizon Communications stock ended Wednesday trading at $37.88.

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.

Vornado posted very solid third-quarter results on lower operating expenses, higher fee income and other income, partially offset by lower reimbursement and rental revenues. While the company does not provide guidance, management maintained its outlook for costs and yields on its development projects. It was an active quarter for financing activity. Vornado entered into $2 billion of interest rate
swaps for the year and extended its $500 million swap. It also reduced its float rate debt exposure to 27% from 47%.

An 8.44% distribution comes with holding Vornado Realty Trust stock. The Truist Financial target price is $33. The consensus target is $25.82. The shares closed on Wednesday at $24.26.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

These eight top stocks are, for a variety of reasons, trading incredibly cheap and offering investors timely entry points. However, it still may be very prudent to start with buying partial positions, as the market has a plethora of issues to deal with and has had the tailwind from a bear market rally for the past few weeks.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.