The newest rage in investing, for many who are not chasing artificial intelligence stocks, has been going to the safest possible investments. Short-dated Treasury debt and government-insured money-market funds have seen an explosion in cash infusions, and likely they will continue to gather more as rates for the two-year Treasury and short-dated government debt all yield more than 5%. In addition, many money market funds (insured by the FDIC to up to $250,000) are yielding 4.5% and more with daily liquidity. Certificates of deposit for one to three years are also yielding over 5%, but you can pay a penalty for early withdrawal. All this has come to fruition over the past year and a half as interest rates have soared from 0.0% to 5.5% for federal funds.

The key for stock and bond investors is that inflation, which has spiked some from soaring oil prices, has been pulled way down from 9.1% in the summer of 2022. Eventually, the Federal Reserve will lower interest rates to get the economy moving, likely late in 2024, if not earlier. Investors that have higher-yielding stocks and bonds could see a big rally when those rates start coming down.

We screened our 24/7 Wall St. dividend and value screen for stocks with among the largest dependable dividends that could rally sharply when rates do start to fall. Seven top picks came up, and all make sense for growth and income investors.

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

Alliance Resource Partners

This is a leader in the thermal coal business and also offers solid diversity. Alliance Resource Partners L.P. (NASDAQ: ARLP), a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company produces a range of thermal and metallurgical coal with sulfur and heat contents.

It operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania and West Virginia. In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. It buys and resells coal, as well as owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas producing regions primarily in the Permian, Anadarko and Williston Basins.

Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems and data and analytics software.

Investors receive a 14.01% distribution. Benchmark has a $28 target price for Alliance Resource Partners stock. The consensus target is $28.67, and Wednesday’s closing share price was $20.40.

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.
In June, Altria purchased NJOY Holdings, which makes electronic cigarettes and vaping products, for a $2.75 billion consideration. Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer, which some feel is worth more than $10 billion and may be a segment of the company that could be sold. Given the public relations issues the company has faced this year, it could very well be on the chopping board.

The company has increased its dividend for 52 consecutive years and just announced another increase effective October 10, when the dividend moves to $0.98 per share from $0.94.

Shareholders receive an 8.82% dividend. The Jefferies target price is $55, and Altria stock has a consensus target of $45.68. The shares closed on Wednesday at $44.75.

AT&T

This legacy telecommunications company has been going through a long restructuring, has sold off or merged underperforming assets and has lowered its dividend. 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. Its 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.

Recent negative press over the potential clean-up of lead landlines has caused the stock to be crushed. However, with huge cash flow and a solid customer base, this could be a massive total return win as the dividend now remains safe.

AT&T stock comes with a 7.68% dividend. Wells Fargo has set its price objective at $20, while the consensus target is $18.61. The stock closed on Wednesday at $14.62.

Energy Transfer

This top master limited partnership (MLP) is a safe way for investors looking for energy exposure and income. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all the major domestic production basins.
Energy Transfer is a publicly traded limited partnership with core operations that include complimentary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGLs) and refined product transportation and terminaling assets; NGL fractionation; and various acquisition and marketing assets.

After the purchase of Enable Partners last December, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in all the major U.S. producing regions and markets across 41 states, further solidifying its leadership position in the midstream sector.

Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco, as well as the general partner interests and 39.7 million common units of USA Compression Partners.

The distribution yield is 9.08%. The $18 Mizuho price target compares with a consensus target of $17.29, as well as Wednesday’s close for Energy Transfer stock at $13.54.

Lincoln National

Insurance never goes out of style, and this is one of the top companies in the industry. Lincoln National Corp. (NYSE: LNC) operates multiple insurance and retirement businesses in the United States.

Its Annuities segment offers variable, fixed and indexed variable annuities. The Retirement Plan Services segment provides employers with retirement plan products and services, primarily in the defined contribution retirement plan marketplace. This segment offers individual and group variable annuities, group fixed annuities and mutual fund-based programs, as well as a range of plan services, including plan recordkeeping, compliance testing, participant education, and trust and custodial services.

The Life Insurance segment provides life insurance products, including term insurance, such as single and survivorship versions of universal life insurance. It offers variable universal life insurance, indexed universal life insurance products and a critical illness rider.

Lincoln National stock investors receive a 7.19% dividend. The Goldman Sachs price objective of $30 is higher than the $26.08 consensus target and Wednesday’s close at $24.66.

Starwood Property Trust

Real estate legend Barry Sternlicht runs this high-yielding real estate investment trust with big-time total return potential. Starwood Property Trust Inc. (NYSE: STWD) operates in the United States, Europe and Australia through the following segments.

Its Commercial and Residential Lending segment originates, acquires, finances and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, including distressed or nonperforming loans.
Starwood’s Infrastructure lending segment originates, acquires, finances and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment.

The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade and non-investment grade rated CMBS comprising subordinated interests of securitization and resecuritization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts.

The distribution yield is 9.34%. Starwood Property Trust stock has a $24 price target at JMP Securities. The consensus target is $21.69, and shares closed at $20.58 on Wednesday.

Truist Financial

This company was created through a merger of SunTrust Bank and BB&T in 2019. Truist Financial Corp. (NYSE: TFC) provides banking and trust services in the southeastern and mid-Atlantic United States. Its deposit products include non-interest-bearing checking, interest-bearing checking, savings and money market deposit accounts, as well as certificates of deposit and individual retirement accounts.

The company also provides funding; asset management; automobile lending; bankcard lending; consumer finance; home equity and mortgage lending; insurance, such as property and casualty, life, health, employee benefits, workers compensation and professional liability, surety coverage, title, and other insurance products; investment brokerage; mobile/online banking; and payment, lease financing, small business lending, and wealth management/private banking services.

In addition, Truist offers association, capital market, institutional trust, insurance premium and commercial finance, international banking, leasing, merchant, commercial deposit and treasury, government finance, commercial middle market lending, small business and student lending, floor plan and commercial mortgage lending, mortgage warehouse lending, private equity investment, real estate lending and supply chain financing services. It provides corporate and investment banking, retail and wholesale brokerage, securities underwriting and investment advisory services.

Shareholders receive a 7.27% dividend. Citigroup’s target price is $39, and the consensus target is $36.31. Truist Financial stock closed almost 5% lower on Wednesday at $28.62 after a plan to cut expenses was announced.

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While it could be a year or longer before the Federal Reserve starts to lower rates, history tells us it will at some point. With consumers loading up credit card debt at very high interest rates, and the economy likely to slip into recession next year, the Fed can only hold a hard line for so long before rates start to come back down. When they do, stocks that pay big dividends and longer maturity Treasury and corporate debt could see big moves higher.

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