It’s no surprise to longtime investors that total return is a key for success now, as the markets print all-time highs and yields are at all-time lows. We like to remind readers about the impact total return has on portfolios because it is one of the best ways to help improve the chances for overall investing success. Total return is the combined increase in a stock’s value plus dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13% — 10% for the increase in stock price and 3% for the dividends paid.

The UBS Dividend Ruler portfolio continue to outperform the overall market, and we continue to think that the outperformance will stay in place for the rest of the year and beyond. The analysts focus on stocks with solid dividends that have consistently grown over time, and their performance this year is outstanding. Through the first seven months of 2016 the portfolio is up 10.4% on a total return basis, versus 8.2% for the S&P 500.

We screened the holdings for the current highest yielding stocks and found four that still make good sense for the last half of 2016. All are also rated Buy at UBS.

Coca-Cola

This company remains a top Warren Buffet holding and offers not only safety, but an incredible strong worldwide brand. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.

Led by Coca-Cola, its portfolio features 20 billion-dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade and Minute Maid. Globally, it is the top provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy its beverages at a rate of more than 1.9 billion servings a day.

Despite reporting second-quarter earnings that came in above some estimates, slower growth and flat volumes brought out the sellers and they tagged the stock big time. It is important to remember though that the company own 31.5% of Monster Beverage, which continues to deliver big numbers.

Coca-Cola investors receive a 3.22% dividend. The UBS price target for the stock is $50, while the Wall Street consensus target is $47.88. The stock closed Friday at $43.48.

Intel

This leader in semiconductors is working hard to scale away from dependence on personal computers. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide. The company’s platforms are used in various computing applications comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

The company also provides communication and connectivity offerings, such as baseband processors, radio frequency transceivers and power management integrated circuits, and tablet, phone and Internet of Things solutions, which include multimode 4G LTE modems, Bluetooth technology and GPS receivers, software solutions and interoperability tests, as well as home gateway and set-top box components.

Intel reported an inline first quarter, but data center sales came in way below expectations for the tech giant. UBS said this in a recent research report:

We keep a Buy rating as we believe Intel can still grow its second half 2016 data center sales by 17% year-over-year and end the year at $17.9 billion (up 12% yoy). We believe the stock will continue to trade on sales trends in its data center business as we estimate this business is around 50% of its total earnings-per-share. We were surprised that data center sales in second quarter only grew 5% yoy and expect the stock could trade lower in the near term as this is below its long term guidance of over 10% growth.

Intel investors receive a 2.97% dividend. UBS recently raised its price target to $40 from $35. The consensus price target is $36, and shares closed Friday at $37.61.

McDonald’s

The fast-food giant has been hit hard since earnings were released, but it remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global foodservice retailer, with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business persons.

The company reported solid second-quarter results, but the U.S. store comparable sales growth of just less than 2% disappointed investors. Strategic charges and refranchising gains muddied the earnings waters, but UBS remains positive on the rest of the year.

Shareholders receive a 3.0% dividend. UBS has a $138 price target, while the consensus target is $130.29. The shares closed Friday at $119.21

United Technologies

This is a very diversified company with large government contract exposure and continues to be a most preferred company at UBS. United Technologies Corp. (NYSE: UTX) is an industrial that provides high-technology products and services to aerospace industries and building systems worldwide. Its segments are UTC Climate, Otis, Controls & Security, UTC Aerospace Systems, and Pratt & Whitney.

Many Wall Street analysts believe the company is strategically positioned to benefit from two megatrends in the long-term: urbanization and commercial aerospace. The company received good news recently as the military and foreign buyers are set to increase purchase of the F-135 Jets. UTC’s Pratt & Whitney division, which builds the F135 engine for the military, earns a superb 22.5% profit margin on its products.

The UBS team is bullish on the earnings beat for the second quarter and the raised guidance. They also noted that the company repurchased $36 million in stock during the quarter. United Technologies remains a solid industrial holding for growth and income accounts.

Investors are paid a 2.45% dividend. The $118 UBS price objective compares with the consensus price target of $113.56. The stock closed Friday at $107.74.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Total return, liquidity and rising dividends is what makes these four top stocks good candidates for longer-term growth and income accounts. Investors may want to buy partial positions now and see if we don’t get an August or September pullback.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.