Dividend stocks are a favorite among investors for good reason. They provide a steady stream of passive income and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time. Let’s examine the concept of total return. If you purchase a stock at $20 that pays a 3% dividend ($0.60 per share) and the price rises to $22 in a year, your total return is ($22 + $0.60 – $20) = 13%. This combines the price appreciation and the dividend received. BofA Securities has just released its top stock ideas for the third quarter, and four of the companies are incredible dividend ideas that Wall Street also loves.
24/7 Wall St. Key Points:
- With second-quarter earnings on the way, many on Wall Street are cautious
- The high-velocity rally off the April lows has left the market overbought and expensive
- BofA Securities’ top Q3 stock picks are perfect for growth and income investors
- Are the top Q3 dividend ideas from one of Wall Street’s biggest banks good picks for you? Why not schedule a meeting with a financial advisor close to you for a portfolio review today? Click here to get started. (Sponsored)
Why do we cover BofA Securities’ top quarterly ideas?
BofA Securities is one of the top firms on Wall Street, and we have covered the company’s curated stock lists for years. These are their absolute best ideas in several different categories, which also include the Endeavor List, covering small-cap stocks; the Value 10 list, featuring the top analysts’ best value ideas; and the Growth 10 List, a quantitatively generated portfolio of 10 stocks with high expected earnings growth.
For the last 15 years, we have also covered their rotating quarterly stock picks, which typically consist of 8 Buy-rated long ideas and 2 Underperform-rated (short-sell) recommendations. We then screen the list looking for the stocks that are also solid dividend ideas. This quarter, we highlight four top stocks on the list, some with old-school credentials that are perfect for growth and income investors to consider now.
Cisco
Cisco develops, manufactures, and sells networking hardware, software, telecommunications equipment, and other high-technology services and products. This legacy technology giant is nearing a 52-week high and offers a solid dividend yield. Cisco Systems, Inc. (NASDAQ: CSCO | CSCO Price Prediction) designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry, seeking a 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
Furthermore, the company provides a range of services 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.
The BofA Securities target price is set at $76
KeyCorp
This regional bank offers a sizable dividend and outstanding growth prospects. KeyCorp (NYSE: KEY) is a bank-based financial services company that operates through its subsidiary, KeyBank National Association (KeyBank).
Through KeyBank and certain other subsidiaries, it provides a range of L
- Retail and commercial banking
- Commercial leasing
- Investment management
- Consumer finance
- Student loan refinancing
- Commercial mortgage servicing and special servicing
- Investment banking products and services to individual, corporate, and institutional clients
Its segment includes:
- Consumer Bank
- Commercial Bank
The Consumer Bank serves individuals and small businesses by offering a variety of deposit and investment products, as well as personal finance and financial wellness services, lending, student loan refinancing, mortgage and home equity services, credit card services, treasury services, and more.
The Commercial Bank consists of the Commercial and Institutional operating segments. The Commercial operating segment is focused on serving the borrowing, cash management, and capital markets.
The BofA Securities target price objective is posted at $20.
Levi Strauss
Regardless of your Generation, this legendary clothing giant is a stock with a solid dividend that resonates with all investors. Levi Strauss & Co. (NYSE: LEVI) designs and markets jeans, casual wear, and related accessories for men, women, and children under the Levi’s, Levi Strauss Signature, Denizen, Dockers, and Beyond Yoga brands.
The Company operates through three geographical segments:
- Americas
- Europe
- Asia
It designs, markets, and sells products directly or through third parties and licensees, including jeans, casual and dress pants, tops, shorts, skirts, dresses, jackets, footwear, and related accessories for men, women, and children worldwide.
The Company’s products are sold in more than 120 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,400 retail stores and shop-in-shops. Outside the United States, department stores, specialty retailers, franchised or other brand-dedicated stores, and shop-in-shops are its primary distribution channels.
BofA Securities’ target price is $21.
Medtronic
Medtronic plc (NYSE: MDT) is a leading medical technology company that pays a dependable dividend and is a solid choice for investors seeking a safe investment in the healthcare devices sector. The company develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide.
The Cardiovascular Portfolio segment offers:
- Implantable cardiac pacemakers
- Cardioverter defibrillators
- Cardiac resynchronization therapy devices
- Cardiac ablation products
- Insertable cardiac monitor systems
- TYRX products, remote monitoring, and patient-centered software
It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, transcatheter pulmonary valves, percutaneous coronary intervention products, and percutaneous angioplasty balloons.
The Neuroscience Portfolio segment offers:
- Medical devices and implants
- Biologic solutions
- Spinal cord stimulation and brain modulation systems
- Implantable drug infusion systems
- Interventional products
- Nerve ablation systems under the Accurian name
The segment offers products for spinal surgeons, neurosurgeons, neurologists, pain management specialists, anesthesiologists, orthopedic surgeons, urologists, urogynecologists, interventional radiologists, ear, nose, and throat specialists, as well as energy surgical instruments.
The Medical Surgical Portfolio segment offers:
- Surgical stapling devices
- Vessel sealing instruments
- Wound closure and electrosurgery products
- AI-powered surgical video and analytics platform
- Robotic-assisted surgery products
- Hernia mechanical devices
- Mesh implants
- Gynecology products
- Gastrointestinal and hepatologic diagnostics and therapies
- Therapies to treat other non-exclusive diseases and conditions, and patient monitoring and airway management products.
The Diabetes Operating Unit segment provides insulin pumps and consumables, continuous glucose monitoring systems, and InPen, an innovative insulin pen system.
The target price at BofA Securities is $100.
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