Needless to say, the events of last weekend reminded everybody that the threat of terrorism is global, and every time a horrific incident takes place, it puts stress on equity markets here and around the world. While investors cannot constantly shuffle the holdings in their portfolios based on every event, they can shift to companies that pay solid dividends and are less vulnerable to volatility selling.
We screened the Merrill Lynch research universe for stocks that are not only top dividend payers, but those that do most or all of their business here in the United States. We found four top companies that are rated Buy at Merrill Lynch
Lockheed Martin Corp. (NYSE: LMT) is a top aerospace and defense stock to buy, and many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending. Employing 112,000, Lockheed Martin engages in the research, design, development, manufacture, integration and sustainment of technology systems, products and services. It also provides management, engineering, technical, scientific, logistics and information services. Its Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles and related technologies.
The company just completed its $9 billion acquisition of Sikorsky, and analysts around Wall Street generally have applauded the deal as Lockheed becomes the world’s largest maker of military helicopters. It also became the maker of the world’s most sophisticated autonomous helicopters, with no clear competition in sight. Both Lockheed and Sikorsky are already transforming airborne logistics for the U.S. military, and they could soon transform airborne logistics for industry as well. This continues a tradition at Lockheed of making bolt on acquisitions that strengthen the company’s overall product portfolio.
Lockheed Martin investors receive a very solid 3.05% dividend. The Merrill Lynch price target is $250, and the Thomson/First Call consensus target is $226.53. The stock closed most recently at $220.67.
This is a top stock to buy in the rapidly consolidating managed health sector. UnitedHealth Group Inc. (NYSE: UNH) offers the full spectrum of health benefit programs for individuals, employers and Medicare and Medicaid beneficiaries, and it contracts directly with more than 850,000 physicians and care professionals and 6,000 hospitals and other care facilities. The company offers a broad spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides health care coverage and benefits services, and Optum, which provides information and technology-enabled health services.
The company has posted outstanding earnings over the past year, and it is one of the companies that limited exposure to the public exchanges. Trading at 3.3 times book value, and offering investors a good entry point, the stocks makes great sense now.
UnitedHealth investors receive a 1.8% dividend. The Merrill Lynch price target for the stock is $150, and the consensus target is $146.45. Shares closed Monday at $113.82.