Merrill Lynch Lifts Targets on 4 Blue-Chip Dividend Companies to Buy

By Lee Jackson Updated Jan 12, 2:14PM EST · Published Mar 6, 8:25AM EST

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Merrill Lynch Lifts Targets on 4 Blue-Chip Dividend Companies to Buy — © courtesy of McDonald's Corp.

[cnxvideo id=”510061″ placement=”ros”]Like the proverbial Energizer Bunny, the market just keeps going and going, and the money is flowing into equity mutual funds and exchange traded funds at a furious pace. Long-time investors are probably becoming a little nervous, as the markets continue to go higher and solid bargains become harder to find. At 24/7 Wall St. we continue to look for stocks that are performing well and are having their price targets raised.

In a series of new reports, Merrill Lynch has raised price targets on four blue chip companies rated Buy that have posted some outstanding numbers. These stocks are a good fit for growth-oriented portfolios that have a higher degree of risk tolerance.

American Express

This stock has had a solid year and is on the Merrill Lynch US 1 list, but is still down almost 20% from highs printed in 2014. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travel-related services to consumers and businesses worldwide.

The company’s products and services include charge and credit card products; payments and expense management products and services; consumer and business travel services; stored value products, such as traveler’s checks and other prepaid products; and network services.

Shareholders receive a 1.6% dividend. Merrill Lynch raised its price target to $94 from $90. The Wall Street consensus target is much lower at $81, and the stock closed Friday at $79.88 a share.

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McDonald’s

The fast-food giant has been on a roll since early November, but it still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global foodservice retailer, with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business persons.

The company reported earnings and revenue that outpaced analysts’ estimates, but a drop in U.S. comparable restaurant sales sparked some concerns. In the fourth quarter, earnings excluding items were higher than in the same period of last year, but revenue fell 5%.

McDonald’s shareholders are paid a tasty 2.95% dividend. The Merrill Lynch price target goes to $145 from $140, while the consensus price target is $132.52. The stock closed on Friday at $127.90.

Physicians Realty Trust

This may be one of the best growth and income stories for 2017 and beyond. Physicians Realty Trust (NYSE: DOC) is an internally managed health care real estate investment trust that seeks to acquire, selectively develop, own and manage health care properties that are leased to physicians, hospitals and health care delivery systems.

As of the third quarter of 2016, the company owns 235 properties located in more than 19 states with 10.2 million leasable square feet. The property split is 90% medical office buildings, 7% surgical hospitals and 3% post-acute hospitals.

Investors receive a 4.55% distribution. The $21.50 Merrill Lynch price target was raised to $22. The consensus target is $21.17. The shares ended last week at $19.80.

Toronto-Dominion Bank

This is a top yielding financial stock to add to portfolios. The Toronto-Dominion Bank (NYSE: TD) operates through Canadian Retail, U.S. Retail and Wholesale Banking segments. The Canadian Retail segment offers various financial products and services, as well as telephone, internet and mobile banking services to approximately 15 million personal and small business customers through a network of 1,165 branches and 2,867 automated banking machines in Canada.

The company’s TD Ameritrade business is incredibly fast-growing and consistently challenges for online supremacy among the top Wall Street investment banks.

The stock remains a top pick at Merrill Lynch as it posted very solid earnings driven by fee income growth. The analysts feel that the company offers investors one of the most compelling risk/reward opportunities among the top Canadian banks.

Investors are paid a 3.45% dividend. The Merrill Lynch price target goes to $57 from $56, and the compares with the consensus price objective of $52.60. The shares closed last Friday at $52.10.

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These four companies seems to be hitting on all cylinders, and again the only fly in the ointment is that the market as a whole is overbought and expensive. It may make sense to scale-buy shares over perhaps a three-month basis to avoid buying the entire position at the top.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.