24/7 Wall St. Insights

• Dividend stocks will stay popular as interest rates drop.
• Passive income from quality blue chips is always a winning investment plan.
• Passive income is simple- own quality dividends that pay you for doing nothing. Don’t miss out on our brand-new “7 Things I Demand in a Dividend Stock” report. It includes two A++ dividend stocks and how to spot future dividend winners that can put your returns on hyperdrive. Access two legendary, high-yield dividend stocks Wall Street loves.

Most dividend investors seek solid passive income streams from quality dividend stocks. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments like dividend stocks, bonds, mutual funds, real estate, and additional income-producing side hustles.

For years, we have covered the BofA Securities US 1 List of top stock picks, and investors who bought them have done exceptionally well. With the fourth quarter underway and many investors looking for safer ideas amid a sustained market rally and major indices reaching all-time highs, we have identified four US 1 stocks that offer serious upside potential and pay substantial, reliable dividends.

The BofA Securities US 1 list is a collection of BofA Global Research analysts’ best investment ideas drawn from the universe of Buy-rated, U.S.-listed stocks, including American depositary receipts. The list is managed to provide superior long-term investment performance.

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.

Cisco

This legacy technology giant is close to reaching a 52-week high and offers a solid 3.05% dividend Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry in:

• The Americas
• Europe
• The Middle East
• Africa
• The Asia Pacific
• Japan
• China

The company also offers a switching portfolio that encompasses campus switching as well as:

• Data center switching
• Enterprise routing portfolio interconnects public and private wireline and mobile networks, delivering highly secure and reliable connectivity to campus, data center, and branch networks
• Wireless products include wireless access points and controllers
• Compute portfolio including the Cisco unified computing system, hyperflex, and software management capabilities, which combine computing, networking, and storage infrastructure management and virtualization

In addition, it provides internet for future products consisting of:

• Routed optical networking
• 5G
• Silicon and optics solutions
• Collaboration products, such as meetings, collaboration devices, calling, contact centers, and communication platforms as a service
• End-to-end security product consists of network security, cloud security, security endpoints, unified threat management, and zero trust
• Optimized application experience products, including full-stack observability and network assurance

Further, the company offers a range of service and support options for its customers, including technical support, advanced services, and advisory services. It serves businesses of various sizes, public institutions, governments, and service providers.

Goldman Sachs

The white-glove banking giant still offers a 2.45% dividend and industry-leading strength. Goldman Sachs Group Inc. (NYSE: GS) is a financial institution that provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide.

It operates through:

• Global Banking & Markets
• Asset & Wealth Management
• Platform Solutions segments

The Global Banking & Markets segment provides financial advisory services, including:

• Strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs
• Relationship lending and acquisition financing; and secured lending through structured credit and asset-backed lending and funding under securities-to-resale agreements.

This segment also offers client execution activities for cash and derivative instruments, credit and interest rate products, and provision of mortgages, currencies, commodities, and equities-related products, as well as underwriting services.

The Asset & Wealth Management segment manages assets across various classes, including equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities.

It provides:

• Customized investment advisory solutions
• Wealth advisory services,
• Personalized financial planning
• Private banking services
• Investments in corporate equity, credit, real estate, and infrastructure assets

The Platform Solutions segment offers credit cards and point-of-sale financing for the purchase of goods or services. This segment also provides cash management services, such as deposit-taking and payment solutions for corporate and institutional clients.

Sempra

Like the entire sector, this utility has run hard but is still offering a solid 3% dividend. Sempra (NYSE: SRE) operates as an energy infrastructure company in the United States and internationally.

It operates through three segments:

• Sempra California
• Sempra Texas Utilities
• Sempra Infrastructure

The Sempra California segment provides San Diego County electric and natural gas services. As of December 31, 2023, it offered electric services to approximately 3.6 million people and natural gas services to approximately 3.3 million people, covering 4,100 square miles.

This segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. As of December 31, 2023, it serves a population of 21 million, covering 24,000 square miles.

The Sempra Texas Utilities segment engages in regulated electricity transmission and distribution. As of December 31, 2023, its transmission system included:

• 18,298 circuit miles of transmission lines
• 1,257 transmission and distribution substations
• interconnection to 173 third-party generation facilities totaling 54,277 MW
• Distribution system including approximately 4.0 million points of delivery and consisted of 125,116 miles of overhead and underground lines.

The Sempra Infrastructure segment develops, builds, operates, and invests in energy infrastructure to help enable the energy transition in North American markets and worldwide.

Union Pacific

This legacy railroad offers safety and a 2.20% dividend. Union Pacific Corp. (NYSE: UNP), through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States.

The company offers transportation services for:

• Grain and grain products
• Fertilizers
• Food and refrigerated products
• Coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users
• Construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers

Goldman Sachs Top Analysts Love 5 Buy-Rated High-Yield Dividend Stocks

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