Volatility Has Skyrocketed: Play It Safe With 4 Big Dividend Blue Chips

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JPMorgan

This stock trades at a very low 10.8 times estimated 2017 forward earnings and could respond well in a rising rate scenario. JPMorgan Chase & Co. (NYSE: JPM) is expected to continue to benefit from commercial loan growth and an upturn in capital spending. Wall Street analysts agree that the stock seems attractively valued on estimated price-to-earnings and a very solid price-to-book value. Some on Wall Street have cautioned that last year’s divestiture of the physical commodities business could provide earnings headwind throughout this year.

The company reported outstanding third-quarter results, and Merrill Lynch thinks the results are sustainable going forward. The firm raised its estimates for 2017 and feels JPMorgan can earn as much as $7 a share by 2018. Despite being a crowded trade, Merrill Lynch also feels that the bank’s superior earnings growth should continue the stock’s outperformance.

Improvement in loan growth, terrific equity capital markets and a steady increase in deposits will be a solid plus. Trading at a discount to many of the large cap banks on 2016 earnings estimates helps upside potential as well. With $2.6 trillion in assets on a worldwide basis, and one of Wall Street’s savviest leaders in Jamie Dimon, the stock is a solid buy for investors.

Earlier this year, Dimon put his money where his mouth was and reportedly bought a stunning 500,000 shares of JPMorgan stock for a massive $26 million. That brought his total holdings in the bank to 6.7 million shares, worth over $360 million.

Investors receive a 2.8% dividend. The UBS price target is set at $76 and the consensus target is $72.24. Shares closed Thursday at $68.38.

Mattel

This top toy maker continues to pay outstanding dividends, and toys rarely are out of favor. Mattel Inc. (NYSE: MAT) designs, manufactures and markets a range of toy products worldwide. It offers dolls and accessories, vehicles and play sets, and games and puzzles under brands that include Barbie, Monster High, Disney Classics, Ever After High, Little Mommy, Polly Pocket, Hot Wheels, Matchbox, Toy Story, Max Steel, WWE Wrestling and DC Comics.

The company also provides its products under the Fisher-Price brands, including Fisher-Price, Little People, BabyGear, Laugh & Learn, Imaginext, Thomas & Friends, Dora the Explorer, Mickey Mouse Clubhouse, Disney Jake, the Never Land Pirates and Power Wheels. In addition, it offers its products under the American Girl brands, as well as construction and arts and crafts brands, such as MEGA BLOKS, RoseArt and Board Dudes. It also publishes the American Girl magazine.

UBS noted in a recent research report:

Mattel’s Jurassic license starts in July of 2017, with initial product (action figures, playsets, vehicles, games, plush, role-play, preschool etc.) expected to hit shelves in early 2018. Jurassic Park did ~$100M in net sales last year for Hasbro.

Investors receive a 5.06% dividend. UBS has a $36 price target. The consensus target is $35.64, and shares closed Thursday at $30.05.

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These four outstanding companies should continue to prosper regardless of who is voted in next week. Even if we do get an election related sell-off, it should be brief and investors would be smart to buy any big dip.