September will be over this week, but the other month that can sometimes prove dangerous is on deck. October has been notorious when it comes to big sell-offs, and while a huge crash doesn’t seem likely, the bottom line is some black swan event like 9/11 is always in the cards. The question for investors getting nervous about the market, the election and the general state of the global macro picture is what stocks will hold up best if we do get hit hard.
We screened the Merrill Lynch research universe looking for stocks that were rated Buy, had a decent dividends, and also had the safest volatility risk rating at the firm We found four companies that makes sense for investors getting a touch nervous about the overall market.
This stock has had an incredible run this year but is off over 10% in less than a month. 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 its shares trading at a very cheap 14.3 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.
AT&T is in the Merrill Lynch US 1 portfolio and has several major catalysts that likely will drive strong network traffic demand: DirecTV Now and Mobile, “Data-Free TV” for DirecTV/U-verse subscribers and increasing penetration of unlimited data plans. Many on Wall Street believe that the company is well-positioned to address ongoing traffic requirements, with additional LTE capacity available and the ability to leverage small cell deployments.
Other top Wall Street analysts have cited the company’s positive commentary on free cash flow, and improving video/broadband trends later this year with single truck-roll and new converged offerings are expected to be coming next month.
AT&T investors receive a huge 4.67% dividend. The Merrill Lynch price target for the stock is $46, and the Wall Street consensus price objective is $42.83. Shares closed Monday at $41.14.
This top dividend payer is also a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) is the stock to buy in consumer staples. The company continues to deliver solid execution and is one of the best-positioned companies in the consumer staples sector, given its strong brands in attractive categories, particularly oral care.
More than half (52%) of total revenues at Colgate are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across the Brazil, Russia, India, China (BRIC) regions. While those have slowed over the past year, a pickup in growth could be coming.
Back in the spring, Colgate increased the quarterly common stock cash dividend by 3%. The company has declared a new quarterly dividend of $0.39 per share on its common stock and will go ex-dividend next month on October 20.
Colgate-Palmolive investors are now paid a 2.13% dividend. The Merrill Lynch price target is $80, and the consensus target is $76.56. Shares closed Monday at $73.11.