Investing

4 Super Safe Dividend Stocks to Survive the Election Fallout

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While it has become somewhat clear that the stock market and much of Wall Street may be rooting for a Hillary Clinton victory, a come-from-behind victory by Donald Trump could always happen. If it does, we could be in for a huge selling spree. The market in general fears a Trump win as trade could be affected, and it sees a Clinton win as pretty much maintaining the status quo.

However, in the event Trump does win, there could be some big selling, and stocks that are more volatile, and especially those in the overcrowded areas like semiconductors, could get hit hard. With interest rates still staying low, and investor still looking for yield, we found four very safe stocks in the Merrill Lynch research universe rated Buy with the firm’s top volatility and risk rating for safety.

AT&T

This company has had an incredible run this year but is off over 10% in less than six weeks. 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.

With its shares trading at a very cheap 14.3 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.

AT&T has several major catalysts that likely will drive strong network traffic demand: DirecTV Now and Mobile, “Data-Free TV” for DirecTV/U-verse subscribers and increasing penetration of unlimited data plans. Many on Wall Street believe that the company is well-positioned to address ongoing traffic requirements, with additional LTE capacity available and the ability to leverage small cell deployments.

Other top Wall Street analysts have cited the company’s positive commentary on free cash flow, and improving video/broadband trends later this year with single truck-roll and new converged offerings are expected to be coming next month.

AT&T investors are paid a huge 4.9% dividend. The Merrill Lynch price target for the stock is $46, and the Wall Street consensus price objective is at $42.70. The stock closed on Friday at $39.11 a share.

Colgate-Palmolive

This top dividend payer is also a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) is the stock to buy in consumer staples. The company continues to deliver solid execution and is one of the best-positioned companies in the consumer staples sector, given its strong brands in attractive categories, particularly oral care.

More than half (52%) of total revenues at Colgate are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across the Brazil, Russia, India, China (BRIC) regions. While those have slowed over the past year, a pickup in growth could be coming.

Back in the spring, Colgate increased the quarterly common stock cash dividend by 3%. The company has declared a new quarterly dividend of $0.39 per share on its common stock and will go ex-dividend this month on October 20.

Colgate-Palmolive investors are now paid a 2.13% dividend. Merrill Lynch has an $80 price target for the stock, and the consensus target is set at $76.56. Shares closed most recently at $72.31.

Home Depot

This company remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself (DIY), do-it-for-me (DIFM) and professional customers.

Home Depot could also be a benefactor from the damage done in Florida and along the Southeast coast recently from Hurricane Matthew. Toss in the huge rebuilding efforts in Louisiana after the severe flooding there, and the third and fourth quarter results could indeed be a bonanza for the company and investors.

Home Depot investors are paid a 2.18% dividend, The Merrill Lynch price target is posted at $158, while the consensus price objective is at $150.55. Shares closed Friday at $126.42.

NextEra Energy

With a very strong balance sheet, this company looks poised for a solid fourth quarter of 2016 and into 2017, and it is on the Merrill Lynch US 1 list. NextEra Energy Inc. (NYSE: NEE) is a leading clean energy company with consolidated revenues of over $17.0 billion and approximately 44,900 megawatts of generating capacity, which includes megawatts associated with noncontrolling interests related to NextEra Energy Partners.

Headquartered in Juno Beach, Florida, NextEra Energy’s principal subsidiaries are Florida Power & Light Company, which serves approximately 4.8 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, and NextEra Energy Resources, which, together with its affiliated entities, is the world’s largest generator of renewable energy from the wind and sun.

Top analysts feel the company may very well be one of the top total return plays out of the large cap regulated space in the sector. One of the key drivers of NextEra’s growth has been the renewable energy development program, which continues to expand as the company adds new projects to its backlog. Those projects are expected to help grow 6% to 8% compound annual growth in adjusted earnings per share through 2018. Most on Wall Street feel that the steady earnings growth should also provide consistent dividend growth over that same time frame.

Shareholders are paid a 2.76% dividend. The Merrill Lynch price target is $149, and the consensus target is set at $133.94. The stock closed Friday at $124.03 a share.

While the numbers appear to favor Clinton, stranger things have happened in politics, and if there was a big surprise, you can bet traders will not be thrilled.

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