4 Ultra-Secure Dividend Stocks on Sale to Buy Now and Hold Forever

Investing

Published: February 22, 2016 8:35 am

Last Updated: January 13, 2020 12:54 pm

One nice result from the volatility in the markets over the past seven weeks is to lower prices on the stocks that investors who need consistent and safe income may be looking to buy. The driving down of interest rates may have kept the economy from totally blowing up, but it has been a burden on older investors looking to generate solid income. Ten years ago, certificates of deposit were yielding 5% and more, now investors are thrilled to get 1.25%, and the thought of buying Treasury bonds yielding 2.60% for 30-year debt is hardly appealing.

We screened the Merrill Lynch research database, not only for the top dividend yielding stocks rated Buy, but also for the stocks with the analysts lowest volatility risk ratings. We came up with four companies that have been around for years that will continue to pay and increase dividends.

AT&T

This company will continue to serve customers regardless of overall market and economic conditions. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE.

The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions. With shares trading at a very cheap 12.5 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic, but increased device financing plans.

The company announced recently it is working with Salesforce.com to connect Internet of Things data from AT&T’s solutions into Salesforce’s Customer Success Platform. By connecting AT&T M2X into Salesforce’s Service Cloud, companies can automatically create and route service requests, cases or tickets through pre-built workflows.

While fourth quarter earnings were in line with forecasts, and slightly below the Wall Street estimates, a change in accounting for the entertainment group lowered revenue/EBITDA by $300 million for the quarter. Merrill Lynch notes that this knocked three cents off the bottom-line numbers. So all in all, a solid quarter, and another reason for conservative accounts to own the stock, especially with solid DirecTV additions and mid-single-digit earnings growth estimated for 2016.

AT&T investors receive a huge 5.25% dividend. The Merrill Lynch price target for the stock is $40, and the Thomson/First Call consensus estimate is $37.54. Shares closed Friday at $36.57.