24/7 Wall St. Insights

• The fourth quarter is underway, and Wall Street is out with top stock picks.
• Stocks paying dividends should perform well as interest rates drop.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “7 Things I Demand in a Dividend Stock,” plus get our two best dividend stocks to own today. Access two legendary, high-yield dividend stocks Wall Street loves.

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

A study from Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

With the fourth quarter underway, most of the top firms we cover on Wall Street are releasing their top stock ideas for the final three months of 2024. BofA Securities, whom we have covered for years, always has 10 new top picks at the start of every quarter. The 10 stocks, nine of which are Buy-rated, and one is Underperform-rated and ostensibly a short sale idea, are out, and we decided to screen the list for the top dividend ideas.

Three companies with serious upside potential to the BofA Securities price targets look like great ideas. As mentioned, all of them pay dependable dividends to shareholders.

Why do we cover dividend stocks?

Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

Hasbro

With the holidays on the way and offering a hefty 3.85% dividend, this toy giant is a solid fourth-quarter idea. Hasbro Inc. (NYSE: HAS), together with its subsidiaries, operates as a toy and game company in:

• The United States
• Europe
• Canada
• Mexico
• Latin America
• Australia
• China
• Hong Kong

The company operates through Consumer Products, Wizards of the Coast, Digital Gaming, Entertainment, and Corporate and Other segments.

The Consumer Products segment sources, markets, and sells toy and game products. This segment also promotes its brands by out-licensing trademarks, characters, and other brand and intellectual property rights to third parties and selling branded consumer products such as toys and apparel.

Its toys and games include:

• Action figures
• Arts and crafts and creative play products
• Dolls, play sets, preschool toys, plush products
• Sports action blasters and accessories
• vehicles and toy-related specialty products
• Games and other consumer products
• Licensed products, such as apparel, publishing, home goods, electronics, and toy products.

The Wizards of the Coast and Digital Gaming segment promotes its brands by developing trading cards, role-playing, and digital game experiences based on Hasbro and Wizards of the Coast games.

The Entertainment segment develops, produces, and sells entertainment content, including film, television, children’s programming, digital content, and live entertainment.

The company sells its products to:

• Retailers
• Distributors
• Wholesalers
• Discount stores
• Specialty hobby stores,
• Drug stores
• Mail-order houses, catalog stores, department stores, and other traditional retailers
• e-commerce retailers, and directly to customers through its e-commerce websites under the Magic: The Gathering, Hasbro Gaming, Play-Doh, Nerf, Transformers, Dungeons & Dragons, Peppa Pig, and other brand names.

The BofA Securities price target is set at $90.

Starbucks

The ubiquitous coffee retailer has had a rough year, but with a new CEO and 2.35% dividend, this could be a home run total return idea. Starbucks Inc. (NASDAQ: SBUX), together with its subsidiaries, roasts, markets, and retails coffee worldwide.

The company operates through three segments:

• North America
• International
• Channel Development

Its stores offer:

• Coffee and tea beverages
• Roasted whole beans and ground coffee
• Single-serve products
• Ready-to-drink beverages
• Various food products, such as pastries, breakfast sandwiches, and lunch items

The company also licenses its trademarks through licensed stores and grocery and food service accounts.

Starbucks offers its products under these brands:

• Starbucks Coffee
• Teavana
• Seattle’s Best Coffee
• Ethos
• Starbucks Reserve
• Princi

BofA Securities has set a $118 price target for the shares.

Wells Fargo

With a solid 2.90% dividend and many headline issues in the rear-view mirror, this money-center giant makes sense now. Wells Fargo & Co. (NYSE: WFC) is a financial services company that provides diversified banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally.

The company operates through four segments:

• Consumer Banking and Lending
• Commercial Banking
• Corporate and Investment Banking
• Wealth and Investment Management

The Consumer Banking and Lending segment offers diversified financial products and services for consumers and small businesses. These include checking and savings accounts, credit and debit cards, and home, auto, personal, and small business lending services.

The Commercial Banking segment provides financial solutions to private, family-owned, and certain public companies. Its products and services include banking and credit products across various industry sectors and municipalities, secured lending and lease products, and treasury management services.

The Corporate and Investment Banking segment offers a suite of capital markets, banking, and financial products and services, such as:

• Corporate banking
• Investment banking
• Treasury management
• Commercial real estate lending and servicing
• Equity and fixed income solutions
• Sales, trading, and research capabilities services to corporate, commercial real estate, government, and institutional clients

The Wealth and Investment Management segment provides wealth management, brokerage, financial planning, lending, private banking, and trust and fiduciary products and services to affluent, high-net-worth, and ultra-high-net-worth clients.

It also operates through financial advisors in brokerage and wealth offices, consumer bank branches, independent offices, and digitally through WellsTrade and Intuitive Investor.

The BofA Securities price target for the company is posted at $70.

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