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One of the best investments that can be made is buying the S&P 500 dividend aristocrat stocks. That is a collection of 52 companies that have raised dividends each year for at least 25 years, according to S&P Dow Jones Indices. Not only are these outstanding companies, the aristocrats have outperformed the S&P 500 over the past 10 years.

We ran a screen of the highest yielding stocks in the aristocrats to find which were also rated Buy at Merrill Lynch. We found four that fit the bill. Not only can investors feel good about the ongoing dividends, but they have the fundamental research and Buy ratings to back up the investment.

AT&T

This company will continue to serve customers regardless of where oil or the Chinese yuan trade, and the stock and is on the Merrill Lynch US 1 list. 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. While shares trade at a very cheap 12.5 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.

While fourth-quarter earnings were in line with forecasts, and slightly below the Wall Street estimates, a change in accounting for the entertainment group lowered revenue/EBITDA by $300 million for the quarter. Merrill Lynch notes that this knocked three cents off the bottom-line numbers. All in all, a solid quarter, and another reason for conservative accounts to own the stock, especially with solid DirecTV additions and mid-single-digit earnings growth estimated for 2016.

The AT&T AdWorks division is the self-described leader in Addressable TV advertising. It combines unparalleled scale in addressable TV advertising with the best targeting capability in the TV business to deliver a better return-on-investment for advertisers. The AdWorks product suite includes: Addressable TV Advertising, TV Blueprint, Interactive TV and Premium Digital Video Advertising (including Otter Media properties). This is helping to drive revenue at the telecommunications giant.

AT&T investors receive a huge 4.94% dividend. The Merrill Lynch price target for the stock is $40, and the Thomson/First Call consensus estimate is $37.85. Shares closed most recently at $38.88.

24/7 Wall St.
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