24/7 Wall St.

For the second time in less than a week, a major firm that we cover here at 24/7 Wall Street is touting the potential of large cap blue chips that have an increased overseas exposure. In fact, a new JPMorgan research report notes that the top U.S. multinationals are down a stunning 30% since the end of 2013, versus an 11% gain for the S&P 500. Strength of the dollar and a total rout in the commodity sector and a divergence in the U.S. and global business cycles all helped to push this underperformance.

JPMorgan analysts point to the easing of the dollar, a more dovish Federal Reserve than many saw at the beginning of the year, and some early signs of manufacturing stabilizing as among the reasons for their bullishness going forward. The analysts have a large basket of 30 stocks that contain multinationals they are positive on. We screened the basket for some of the top dividend payers and found four that look very attractive now.

Caterpillar

This stock is way out of favor and now trades at a level at which the dividend is the highest in years. Caterpillar Inc. (NYSE: CAT) is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments — Construction Industries, Resource Industries and Energy & Transportation — and also provides financing and related services through its Financial Products segment.

In a huge cost-cutting mode for over a year now, Caterpillar recently announced it will consolidate the Electric Power and Marine & Petroleum Power divisions into the new Electric Power, Marine and Oil and Gas Division. Consolidating these energy operations and integrating them within Customer & Dealer Support will bring higher efficiencies and a streamlined leadership team. Last year, Caterpillar further announced plans of consolidation and the layoff of up to 10,000 employees by 2018. At the end of 2015, its global workforce totaled 105,700 employees, down nearly 11% from 2013.

Any sustained rebound in global growth will benefit this top blue chip stock. Caterpillar currently still trades 33% below levels set less than two years ago. Patient investors may make a ton adding this stock to a long-term growth portfolio.

Caterpillar investors receive a 4.18% dividend. The Thomson/First Call consensus price target is $61.47, but shares closed most recently at $73.68.

24/7 Wall St.
As Institutional Investors Continue to Sell, 4 Safe Dividend Stocks to Buy and Hold