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 such as dividend stocks, bonds, and mutual funds, as well as 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 Bank of America US1 List of top stock picks, and investors who bought them have done exceptionally well. With the first quarter well underway, many investors are seeking safer ideas amid a sustained market rally that could be on the brink, even as major indices remain near all-time highs. We have identified five US1 stocks with significant upside potential and substantial, reliable dividends.
Why do we cover the Bank of America US1 top picks?
The Bank of America US1 list is a collection of the best investment ideas from BofA Global Research analysts. It is drawn from the universe of Buy-rated, US-listed stocks, including American depository receipts (ADRs). The list is managed to provide superior long-term investment performance.
America Healthcare REIT
With a dependable 1.89% dividend and a red-hot sector, this is an outstanding idea. America Healthcare REIT (NYSE: AHR) is a real estate investment trust (REIT) that acquires, owns, and operates a diversified portfolio of clinical healthcare real estate, focusing primarily on senior housing, skilled nursing facilities, outpatient medical (OM) buildings, and other healthcare-related facilities across the United States, the United Kingdom, and the Isle of Man.
It owns and operates its integrated senior health campuses and senior housing operating properties (SHOP). The company’s segments include:
- Integrated senior health campuses, which provide a range of independent living, assisted living, memory care, skilled nursing services, and ancillary businesses.
- OM buildings are leased to multiple tenants under separate leases.
- SHOP includes senior housing providing assisted living care, as well as other services.
- Triple-net leased properties, which include senior housing, skilled nursing facilities, and hospitals.
The Bank of America price target is set at $60.
Cigna
Cigna Group (NYSE: CI | CI Price Prediction) offers tailored health insurance and employee benefits programs. Healthcare names have been outperforming in 2026, yielding 2.08% and offering solid upside potential. This is another outstanding healthcare idea. Cigna provides insurance and related products and services in the United States.
The Evernorth Health Services segment provides a range of coordinated and point-of-service health services, including
- Pharmacy benefits
- Home delivery pharmacy
- Specialty pharmacy
- Distribution and care delivery
- Management solutions to health plans, employers, government organizations, and health care providers
The company’s Cigna Healthcare segment offers:
- Medical, pharmacy, behavioral health, dental, and other products and services for insured and self-insured customers
- Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, as well as individual health insurance plans; and health care coverage in its international markets, as well as health care benefits for mobile individuals and employees of multinational organizations
In addition, it offers permanent insurance contracts sold to corporations to provide coverage for the lives of certain employees, financing employer-paid future benefit obligations. The company distributes its products and services through insurance brokers and consultants, directly to employers, unions, and other groups and individuals, and through private and public exchanges.
The Bank of America target price is $378.
Merck
Merck (NYSE: MRK) develops and produces medicines, vaccines, biological therapies, and animal health products. It is not just a healthcare company but a global force in the industry. This healthcare giant is another no-brainer, paying a solid 2.67% dividend.
The company operates through two segments. The Pharmaceutical segment offers human health pharmaceutical products in:
- Oncology
- Hospital acute care
- Immunology
- Neuroscience
- Virology
- Cardiovascular
- Diabetes
- Vaccine products, such as preventive pediatric, adolescent, and adult vaccines
The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, health management solutions and services, and digitally connected identification, traceability, and monitoring products.
Merck serves:
- Drug wholesalers
- Retailers
- Hospitals
- Government agencies
- Managed healthcare providers, such as health maintenance organizations
- Pharmacy benefit managers and other institutions
- Physicians
- Physician distributors
- Veterinarians
- Animal producers
Merck’s growth is a result of its efforts and strategic collaborations. The company works with AstraZeneca, Bayer, Eisai, Ridgeback Biotherapeutics, and Gilead Sciences to jointly develop and commercialize long-acting HIV treatments, demonstrating a commitment to innovation and growth.
Bank of America currently has a $132.00 price target on this stock.
Public Service Enterprise
Off the radar for many, this dividend-paying utility stock still has room to run and yields 2.98%. Public Service Enterprise Group (NYSE: PEG) is a regulated infrastructure company operating New Jersey’s transmission and distribution utility, serving approximately 2.4 million electric and 1.9 million natural gas customers. The company also owns an independent fleet of 3,758 MW of carbon-free, baseload nuclear power-generating units.
The company principally conducts its business through two wholly owned subsidiaries. Public Service Electric and Gas (PSE&G) is a public utility engaged principally in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSEG Power (PSEG Power) is an energy supply company that consists of merchant nuclear generating assets and fuel supply functions, and is engaged in competitive energy sales through its principal direct, wholly owned subsidiaries. The company also has other wholly owned subsidiaries.
The Bank of America target price is $84 and is likely to increase soon.
Wells Fargo
Wells Fargo (NYSE: WFC) operates in 35 countries and serves over 70 million customers worldwide. This money-center giant makes sense given its 2.06% dividend yield, as many of the issues that have plagued the company over the past five years appear to be resolved. This financial services company offers a diverse range of 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 a diverse range of financial products and services tailored to meet the needs of consumers and small businesses. These include checking and savings accounts, credit and debit cards, as well as home, auto, personal, and small business lending services.
The Commercial Banking segment provides financial solutions to private, family-owned, and specific public companies. Its products and services include banking and credit products across various industry sectors and municipalities, as well as 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 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.
Bank of America has set a $107 price target.
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