4 Blue Chip Stocks With Dividends at Least 4% and Big Upside Potential

Investing

Published: February 19, 2016 8:20 am

Last Updated: January 13, 2020 1:00 pm

Checked out current U.S. Treasury bond yields lately? If you loan the government money for 30 years, they will pay you a whopping 2.63% yield. After taxes and inflation, that probably works out to about a break-even proposition. Despite the wicked volatility in the markets, equities remain a far better place for most investors to be going forward, especially considering the depth of the sell-offs over the past six months. Yes stocks are expensive, but nowhere near as rich as Treasury debt.

We screened our Wall Street research database, and found four top companies that all yield right at 4% or better and offer investors solid growth potential and outstanding total return potential. All are rated Buy, and make good sense for patient growth and income investors.

AbbVie

This is one of the top global pharmaceutical stocks at Jefferies and is also on the franchise stock picks list. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. Its mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries

One of the biggest concerns with AbbVie is what might happen with anti-inflammatory therapy Humira, which generated $14 billion in sales in fiscal 2015. That $14 billion is the most any drug has recorded during a single year and represents a gigantic part of the company’s overall earnings. But biosimilars and generics are trying to enter the market, with Amgen leading the charge, and some Wall Street analysts project that AbbVie may have a difficult time stopping that trend. AbbVie has said it feels the patents they have are more than strong enough to protect the franchise.

The company reported mixed fourth-quarter numbers, but affirmed guidance, and some on Wall Street were concerned over a new hepatitis C drug from a rival company. Earnings were up 27% from the year-ago quarter and a penny over analysts’ consensus, according to Thomson Reuters. Revenue rose 18% but came in below estimates.

AbbVie investors receive an outstanding 4.18% dividend. The Jefferies price target on the stock is $80, among the highest on Wall Street. The Thomson/First Call consensus target is $72.25. Shares closed Thursday at $54.55.