Rates are still near the lowest levels in history, but by the way dividend stocks are being sold, you would think the late 1970s and early 1980s were right around the corner. The fact of the matter is, based on what most Wall Street strategists are saying, the Federal Reserve will raise rate once this year, in December, and twice each in 2017 and 2018. If every rate hike is 25 basis points, or one-quarter of 1%, the federal funds rate will still be under 2% in 2019.
That news hasn’t stopped investors from selling dividend-yielding stocks like they were going broke. In fact some of the top companies are down 10% to 20% over the past two months, many of which have very bright prospects. We screened our 24/7 Wall St. research data base for stocks that were rated Buy and had a yield of 5% or more, and we found four outstanding companies.
This top retailer also looks to benefit from new releases. GameStop Corp. (NYSE: GME) operates as an omnichannel video game retailer. It sells new and pre-owned video game hardware; physical and digital video game software; pre-owned and value video game products; video game accessories, such as controllers, gaming headsets, memory cards and other add-ons for use with video game hardware and software; and digital products, including downloadable content, network points cards, prepaid digital and subscription cards and digitally downloadable software.
The company also sells mobile and consumer electronics, including smartphones, tablets, headphones and accessories, as well as pre-owned smartphones; personal computer (PC) entertainment software in various genres, including sports, action, strategy, adventure/role playing and simulation; and strategy guides, magazines and gaming-related toys. As of January 30, 2016, it operated approximately 7,117 stores in the United States, Australia, Canada and Europe. GameStop primarily offers its products under the GameStop, EB Games and Micromania names.
Leading Wall Street analysts feel that hardware updates and the holiday release slate this year should help the gaming segment. In addition, the second-half hardware refreshes and fourth-quarter high-quality product releases could help drive traffic to the stores.
GameStop investors are paid a large 5.68% dividend. Merrill Lynch rates the stock a Buy and its price target is $37. The Wall Street consensus price objective is $34.82. The stock closed Tuesday at $26.05 a share.
This top global pharmaceutical could offer outstanding total return for investors as solid portfolio holding. GlaxoSmithKline PLC (NYSE: GSK) offers pharmaceutical products in the therapeutic areas, including respiratory, anti-virals, central nervous system, cardiovascular and urogenital, metabolic, anti-bacterials, and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV. It also provides consumer healthcare products in wellness, oral health, nutrition, and skin health areas.
Last year the company announced that the dividend would stay at its current level through 2017, a solid pledge for those seeking security. Also, the FDA approved the company’s Nucala add-on product for severe asthma with a very broad label. In addition, its ViiV Healthcare unit also reported promising data for its HIV treatments. GlaxoSmithKline plans to submit up to 20 new regulatory filings within the next five years, which confirms a very strong pipeline.
GlaxoSmithKline investors are paid an outstanding 5.11% dividend. The Merrill Lynch price target for the Buy-rated stock is $50. The consensus price objective is set at $48.67. The shares closed Friday at $42.14.