This iconic blue chip industrial was on a strong roll late last year, but it sold off last month and is giving investors a nice entry point. General Electric Co. (NYSE: GE) is a highly diversified, global industrial corporation. Its products and services include power generation equipment, aircraft engines, locomotives, medical equipment, appliances, commercial leasing and personal finance. Merrill Lynch feels that the American giant will be a large player in the efficient energy field.
The company is in the middle of a huge plan that is scaling back many of its operations and returning capital to shareholders. GE announced a restructuring plan last year that includes buying back up to $50 billion of its shares, selling about $30 billion in real estate assets over the next two years and divesting more GE Capital operations. The continued restructuring and sale of the appliance division provides some cushion to earnings estimates
The company posted solid fourth-quarter numbers that were somewhat hampered by slower organic growth, and the Alstom power division purchase, which the company bought from the French turbine maker. The deal was finalized in November for $10 billion and creates a $50 billion turbine services backlog.
GE investors receive a 3.21% dividend. Merrill Lynch has a $33 price target, and the consensus target is $32.29. Shares closed Monday at $28.64.
This top industrial could really jump with an economic pickup, and it is a member of the Merrill Lynch US 1 list and is one of the firm’s top 10 picks for 2016. 3M Co. (NYSE: MMM) is a diversified, global manufacturer with technology-driven businesses. Its popular brands include Scotch, Post-It, 3M and Thinsulate. The company also holds over 500 U.S. patents.
The company crushed earnings expectations for the fourth quarter and rallied huge. The analysts noted that the execution at the company remains outstanding, as there was strength in consumer and health care across all the company’s regions. With margins expanding, this remains an outstanding stock to own.
3M investors receive a 2.76% dividend. The $178 Merrill Lynch price target is well above the consensus estimate of $160.13. The stock closed Monday at $148.73.
Not only are all these blue chip dividend stocks on sale, they are offering solid dividends and appear to be set up for a very solid rest of 2016. Investors looking to add stocks that will fare well in a higher volatility world would do well adding these to growth portfolios now, especially with Wall Street so negative.