5 BofA Securities Top Value Stock Picks Also Pay Big Passive Income Dividends

Investing

Published: May 29, 2024 9:27 am

Investors love dividend stocks because they provide dependable income and a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation.

Amidst a sustained market rally and major indices reaching all-time highs, we’ve identified stocks that offer value and pay substantial, reliable dividends. These dividend stocks are not just about value; they also serve as a source of passive income.

A value stock is a group of stocks the market feels are cheap compared to their intrinsic worth. In addition, the price is lower than its fundamental metrics, such as earnings, book value, or cash flow, which is one of its defining benchmarks.

The BofA Securities Value 10 portfolio is quantitatively generated based on the firm’s proprietary BofA Securities model. The analysts use the S&P 500 as their universe. We screened the current list of companies paying the biggest dividends, all are rated Buy.

Why do we cover value stocks?

As mentioned, with the stock market trading close to all-time highs it makes sense to move capital to companies that are relatively inexpensive to peers, pay big and dependable dividends, and can stand up vbetter should we espeience a major correction this year.

Aflac

Known for quacking duck commercials, shareholders are paid a dependable 2.32% dividends. Aflac Incorporated (NYSE: AFL) through its subsidiaries, provides supplemental health and life insurance products.

The company operates through:

Aflac Japan
Aflac U.S. segments.

The Aflac Japan segment offers cancer, medical, nursing care, work leave, GIFT, and whole and term life insurance products, as well as WAYS and child endowment plans under saving type insurance products in Japan.

The Aflac U.S. segment provides coverage for:

Cancer
Accident
Short-term disability
Critical illness
Hospital indemnity
Dental
Vision
Long-term care and disability
Term and whole life insurance products

It sells its products through sales associates, brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies

Darden Restaurants

It’s a solid bet most of our readers have eaten at one of the companies restaurants, and shareholders receive a tasty 3.53% dividend. Darden Restauranats, Inc. (NYSE: DRI) together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada.

It operates under these well known brand names:

Olive Garden
LongHorn Steakhouse
Cheddar’s Scratch Kitchen
Yard House
The Capital Grille
Seasons 52
Bahama Breeze,
Eddie V’s Prime Seafood
Capital Burger

The company announced in March a massive buy back of shares of up to $1 billion. This should decrease the outstsading shares when complete by almost 6%. This is a very positive development for shareholders. Toss in the acquistion of Ruth Chris Steak House last year and the positives are continuing to pile up for the company.

Entergy

This top utility stock always makes sense for conservative investors and pays a rich 4.04% dividend. Entergy Corporation (NYSE: ETR), together with its subsidiaries, produces and distributes electricity in the United States.

It operates in two segments:

Utility and
Entergy Wholesale Commodities.

The Utility segment generates, transmits, distributes, and sells electric power in portions of :

Arkansas
Louisiana
Mississippi
Texas
The City of New Orleans

The Entergy Wholesale Commodities segment is involved in the:

Ownership, operation, and decommissioning of nuclear power plants located in the northern United States,
The sale of electric power to wholesale customers
The provision of services to other nuclear power plant owners
The ownership of interests in non-nuclear power plants that sell electric power to wholesale customers.

The company generates electricity through gas, nuclear, coal, hydro, and solar sources. It sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies.

Its power plants have approximately 24,000 megawatts (MW) of electric generating capacity, which includes 5,000 MW of nuclear power. The company delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.

Ford Motor Company

This legacy carmaker pays shareholders a rich 4.71 dividend. Ford Motor Company (NYSE: F) develops, delivers, and services a range of Ford trucks, commercial cars, and vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.

It operates through five segments:

Ford Blue
Ford Model e
Ford Pro
Ford Next
Ford Credit

The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors and dealers and dealerships to commercial fleet customers, daily rental car companies, and governments.

It also engages in vehicle-related financing and leasing activities to and through automotive dealers.

In addition, the company provides retail installment sale contracts for:

New and used vehicles
Direct financing leases for new cars to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers.

Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.

The Interpublic Group

While not as well known as some of the other companies, investors are paid a big 4.24% dividend, and the shares offer very solid total return possibilites. The Interpublic Group of Companies, Inc. (NYSE: IPG) provides advertising and marketing services worldwide.

It operates in three segments:

Media, Data & Engagement Solutions
Integrated Advertising & Creativity Led Solutions
Specialized Communications & Experiential Solutions

The Media, Data & Engagement Solutions segment provides:

Media and communications services
Digital services and products
Advertising and marketing technology
e-commerce services,
Data management and analytics, strategic consulting, and
Digital brand experience under the IPG Mediabrands, UM, Initiative, Kinesso, Acxiom, Huge, MRM, and R/GA brand names.

The Integrated Advertising & Creativity Led Solutions segment offers advertising, corporate, and brand identity services, as well as strategic consulting under FCB, IPG Health, McCann Worldgroup, and MullenLowe Group brands.

Specialized Communications & Experiential Solutions segment provides:

Public relations and other specialized communications services
Live events,
Sports and entertainment marketing
Strategic consulting under IPG DXTRA Health, The Weber Shandwick Collective, Golin, Jack Morton, Momentum, and Octagon brand names

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