Most dividend investors seek solid passive income streams from quality dividend stocks. Passive income is a steady stream of unearned income that does not 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. These days, investors, especially those nearing retirement, seek passive income streams to supplement Social Security, pension income, or qualified retirement account withdrawals.
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 first quarter underway and many investors looking for safer ideas amid a sustained market rally and major indices still near all-time highs, we have identified five US 1 stocks that offer serious upside potential and pay substantial, reliable dividends.
Why do we cover the BofA Securities US 1 top picks?
The BofA Securities US 1 list is a collection of the best investment ideas from BofA Global Research analysts. It is drawn from the universe of Buy-rated, U.S.-listed stocks, including American depository receipts (ADRs). The list is managed to provide superior long-term investment performance.
AllianceBernstein
AllianceBernstein is a global asset management firm providing investment management and research services worldwide.
This top money manager and financial giant pays shareholders a rich 9.05% dividend. AllianceBernstein Holding L.P. (NYSE: AB | AB Price Prediction) is a publicly owned investment manager.
The firm manages separate client-focused portfolios for its clients and primarily invests in:
- Common and preferred stocks
- Warrants and convertible securities
- Government and corporate fixed-income securities
- Commodities
- Currencies
- Real estate-related assets
- Inflation-protected securities
AllianceBernstein employs:
- Quantitative analysis
- Long-term purchases
- Short-term purchases
- Trading
- Short sales
- Margin transactions
- Option strategies, including writing covered options, uncovered options, and spread strategies to make its investments
The firm obtains external research to complement its in-house research.
The BofA Securities target price for the shares is set at $42.
American Healthcare REIT
This self-managed real estate investment trust is also a US 1 pick.
With an aging U.S. and world population, this company is in the right real estate silo and pays a 3.41% dividend to shareholders. American Healthcare REIT Inc. (NYSE: AHR) acquires, owns, and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on senior housing, skilled nursing facilities, outpatient medical buildings, and other healthcare-related facilities.
It has properties in the United States, the United Kingdom, and the Isle of Man.
Its segments include:
- Integrated senior health campuses
- OM, SHOP, and triple-net leased properties
OM buildings are leased to multiple tenants under separate leases. Its integrated senior health campuses each provide a range of independent living, assisted living, memory care, skilled nursing services, and ancillary businesses.
The triple-net leased properties segment includes:
- Senior housing
- Skilled nursing facilities
- Hospital investments.
Its SHOP segment includes senior housing, which may provide
- Assisted living care
- Independent living
- Memory care
- Skilled nursing services
The BofA Securities target price for the shares is $36.
Blue Owl Capital
Blue Owl Capital is an American alternative investment asset management company.
The BofA Securities team is very optimistic about Blue Owl Capital Inc. (NYSE: OWL), an alternative asset management company that pays a solid 3.06 dividend.
It deploys private capital across Credit, GP Strategic Capital, and Real Estate platforms for institutional and private wealth clients. Its product platforms include:
- Credit
- GP Strategic Capital
- Real Estate
The company’s Credit products offer private financing solutions to middle-market companies seeking capital. These products are offered through a mix of business development companies, long-dated private funds, managed accounts, and collateralized loan obligations.
It is focused on acquiring equity stakes in or providing debt financing to private capital firms.
The Real Estate products are focused on acquiring triple net lease real estate occupied by investment grade or creditworthy tenants. Its Real Estate products are offered through Permanent Capital vehicles, including its real estate investment trusts and long-dated private funds.
It also provides asset management services to the insurance industry.
The BofA Securities has a price target of $32.
Chevron
This US 1 pick is an American multinational energy corporation predominantly specializing in oil and gas.
This integrated giant is a safer option for investors looking to position themselves in the energy sector and pays a big 4.48% dividend. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.
The company operates in two segments:
- Upstream
- Downstream
The Upstream segment is involved in the following:
- Exploration, development, production, and transportation of crude oil and natural gas
- Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
- Transportation of crude oil through pipelines; and transportation, storage
- Marketing of natural gas, as well as operating a gas-to-liquids plant
The Downstream segment engages in:
- Refining crude oil into petroleum products
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing renewable fuels
- Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.
Chevron announced in late 2023 that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. The Federal Trade Commission approved the deal in October and should close this summer.
BofA Securities has set a price target objective of $180.
Sempra
Sempra is a North American public utility holding company based in San Diego, California.
Like the entire sector, this utility has run hard but still offers a solid 3.03% 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, 2024, 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 megawatts
The distribution system included 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.
The BofA Securities price target is $94.
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