Bond Sell-Off Could Be Huge for Stocks: 4 Analyst Top Pick Dividend Stocks to Buy Now

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Despite the recent highs in the market, investor enthusiasm for stocks has been lousy for years, but that could all be changing now. Jefferies reports that, since the 2009 lows in the market, net cumulative inflows into equities was only $97 billion, and over the past two years the market actually saw net outflows from stocks. Compare that with the $1.5 trillion that went into bonds and bond funds since 2009, investments that are now starting to look dicey as rates steadily march higher.

There is a strong possibility that some of the huge bond cash pile could go into stocks. The Jefferies strategist is predicting that the S&P 500 and the Russell 2000 could both trade-up with mid- to high-single-digit gains in 2017. We screened the Jefferies Franchise List, which is the firm’s highest conviction stocks to Buy for dividend-paying stocks that bond investors may prefer over holding bonds or bond funds.

AbbVie

This is one of the top global pharmaceutical stocks picks across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company’s mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie employs more than 26,000 people worldwide and markets medicines in more than 170 countries.

One of the biggest concerns with AbbVie is what eventually might happen with anti-inflammatory therapy Humira, which generated $14 billion in sales in fiscal 2015. That was the most any drug has recorded during a single year and represents a gigantic part of the company’s overall earnings. The problem is that biosimilars and generics are itching to enter the market with Amgen leading the charge, and some Wall Street analysts project that AbbVie may have a difficult time stopping that trend.

Back in May, the patent board instituted Coherus BioSciences’ Inter Partes Review against the Humira ‘135 patent. The outcome of the review is expected next year. While most analysts remain positive on Humira duration, the expected litigation uncertainty could continue to create an overhang on the stock, which does give investors chances to pick up shares lower.

AbbVie investors receive a 4.31% dividend. The Jefferies price target for the stock is $90, and the Wall Street consensus price target is $69.75. The stock closed Friday at $59.43 per share.

Boeing

This top aerospace industrial has been on a roll since the election and may be ready to breakthrough to multiyear highs. Boeing Co. (NYSE: BA), together with its subsidiaries, designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services worldwide.

The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital.

Recent reports indicate that the U.S. Navy plans to divest its older model F/A-18 Hornet fighter jets in coming years and hopes to buy dozens of F/A-18E/F Super Hornets to deal with a shortfall of strike fighters aboard its carriers. If implemented, the plan would provide dozens of new orders for Boeing and keep its St. Louis production line running for several more years.

Boeing investors are paid a 2.86% dividend. Jefferies has a $165 price objective for the stock, while the consensus target is at $151.22. Shares closed just above that level Friday at $152.25.