The stock market rallied to new highs last week on the strength of Federal Reserve Chairman Ben Bernanke’s comments on the continuation of the easy money policies that are flooding the economy with liquidity. J.P. Morgan Chase & Co. (NYSE: JPM) chief equity strategist Thomas Lee has pretty much gone all in, telling clients to buy equities and buy the dips, even as volatility in the credit markets remains a concern. Which would have been a great strategy following the almost 7% sell-off between May and June. He listed 21 stocks to buy now. We screened for the dividend paying-stocks not trading at 52-week highs, which may hold up better in the event of another quick selloff.
Apple Inc. (NASDAQ: AAPL) is certainly nowhere near a 52-week high, off almost 40% from last summer’s all-time highs. With the iPhone 6 on the way, an Apple watch in the works and new tablets on the drawing board, analysts opinions are now firmly split on the iconic technology company. The Thomson/First Call price target for the stock is $530. Investors are paid a 2.9% dividend.
Symantec Corp. (NASDAQ: SYMC) provides security, storage and systems management solutions to various organization and consumers worldwide. It operates in four segments: Consumer, Security and Compliance, Storage and Server Management, and Services. The consensus price target for this timely stock to buy is $27. Investors are paid a 2.6% dividend.
Wyndham Worldwide Corp. (NYSE: WYN) is a company with strong buyback activity that is also considered a compelling buy by numerous sell-side analysts on Wall Street. The consensus price target for this top lodging stock is $70. Investors receive a 2% dividend.
International Paper Co. (NYSE: IP) is a nondurable stock to buy on the J.P. Morgan list. Net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but it is less than that of the Paper & Forest Products industry average. The net income increased by 69.1% when compared to the same quarter one year prior, rising from $188.00 million to $318.00 million. The consensus price target for the stock stands at $53.50, and investors are paid a 2.6% dividend.
Acacia Research Corp. (NASDAQ: ACTG) is one of the top holdings at investment management firm Columbia Partners. The company enters into licensing agreements with various companies that seek protection from patent claims. Under such licensing agreements, Acacia partners with the patent owners and seeks to license patents to corporate users. The revenue generated is shared between Acacia and the original patent owner, depending on the covenant of the agreement. Consensus price estimates for the stock are at $40. Investors receive a 2.1% dividend. A move to the price target would represent a 60% gain for investors.
Carlyle Group L.P. (NASDAQ: CG) is an excellent way for investors to be involved in private equity, direct investments and fund-of-funds investing while still having liquidity. The company is currently one of many bidding for aerospace telecommunications firm Arinc. The consensus price target for the stock is $32. Investors are paid a 2.6% dividend.
MPLX L.P. (NYSE: MPLX) owns and operates a network of pipeline systems that include approximately 962 miles of common carrier crude oil pipelines and approximately 1,819 miles of common carrier product pipelines in nine states. The consensus price target for the stock is $39.50. Unitholders are paid a 2.9% dividend equivalent. MPLX is a master limited partnership (MLP), and the distribution may contain return of principal.
Portland General Electric Co. (NYSE: POR) is a surprise utility stock to buy on the J.P. Morgan list. The company operates five thermal plants, seven hydroelectric plants and a wind farm located at Biglow Canyon in eastern Oregon, as well as approximately 1,100 circuit miles of transmission lines and 24,000 circuit miles of primary and secondary distribution lines that deliver electricity to its customers. The consensus price target for the stock is $33. Investors are paid a 3.6% dividend.
As money pours out of bond funds and investors realize that stocks are perhaps the only place to be, there is a good chance the markets will trade even higher. However the old Wall Street adage of “nobody ever went broke taking a profit” is one to remember. Investors with large gains may want to take some profits, hold them in cash and look for a better entry point after such a huge rally.
One other big bull market call that really stands out is for a secular bull market resurgence, which would take the S&P 500 Index up from 1,675 or so now up to 2,584 over the next cycle.