24/7 Wall St.

The indicators are flashing yellow, and it may be time for investors to take note. Short sellers have capitulated, as short interest is now at the lowest levels in years. Margin loan debt levels are at their highest point in years, and some are saying old multiple metrics don’t matter. Lastly, we are finally starting to hear the ultimate throw-in-the-towel line getting tossed around: it’s different this time. With earnings starting to wind down, it may be time for some portfolio reviews and changes.

This week the market may have had what some strategists call the start of the blow-off phase, which is generally the last move higher, often in a parabolic move to the highs. Going to all cash is expensive at a full-service broker, and Treasury and corporate bonds have very low yields. One good idea is to move to blue chip dividend stocks that have trailed the big move and pay dividends.

We screened the Merrill Lynch US 1 research database and found five safe stocks that make good sense for investors starting to get nervous. They are also the highest conviction stock picks at the firm.

AT&T

This company has had a nice run off lows posted in November but is still trading below levels printed last summer. 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 14.4 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.

On Tuesday, the company reported first-quarter earnings that met analysts’ expectations, but revenue disappointed. Record-low equipment sales in wireless contributed to a year-over-year drop in revenue.

AT&T investors receive a 4.91% dividend. The Merrill Lynch price objective for the stock is $46, and the Wall Street consensus target is $42.80. Share closed Wednesday at $40.44.

Delta Air Lines

This company consistently has ranked highly with Wall Street. Delta Air Lines Inc. (NYSE: DAL) and the regional Delta Connection carriers offer service to 334 destinations in 64 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft.

Wall Street analysts have long lauded Delta for the most extensive hedging policy among the airlines and it owns and operates a refinery in addition to a sizable hedging book. The stock underperformed last year, and if bookings and the economy continue to spike up in 2017, many believe that the company’s multiple stands to benefit the most among the major carriers.

Delta reported a better-than-expected quarterly profit and forecast passenger unit revenue, a closely watched revenue measure, to increase 1% to 3% in the second quarter, citing healthy demand. The company also said March marked the first month of positive passenger unit revenue since November 2015, and it expects the measure to remain positive throughout the rest of the year.

Delta investors receive a 1.75% dividend. Merrill Lynch has a $64 price objective, and the consensus target price is $61.43. The stock closed most recently at $46.37.

Dover

This is a company that flies under the radar of many investors and is a very solid buy at current trading levels. Dover Corp. (NYSE: DOV) manufactures and sells a range of equipment and components, specialty systems and support services in the United States and internationally. The company operates in four segments: Energy, Engineered Systems, Fluids, and Refrigeration & Food Equipment.

The company reported that first-quarter revenue increased 12% from the prior year. That was driven by acquisition growth of 12% and organic growth of 4%, partially offset by a 3% impact from dispositions and an unfavorable impact from foreign exchange of 1%. Net earnings increases 73% compared to the prior-year period, while diluted net earnings per share saw an increase of 70%.

The company is another industrial that may be positioned to have a stellar year if the initiatives from the Trump administration start to kick in.

Shareholders receive a 2.17% dividend. The $90 Merrill Lynch price target compares with the consensus estimate of $84.11. The stock closed Wednesday at $81.01.

Hess

This top mid/large cap pick is down a stunning 30% this year and actually could be a takeover target. Hess Corp. (NYSE: HES) is an exploration and production company that develops, produces, purchases, transports and sells crude oil, natural gas liquids and natural gas. It primarily operates in the United States, Denmark, Equatorial Guinea, the Joint Development Area of Malaysia/Thailand, Malaysia and Norway.

The company reported a net loss that was narrower than in the first quarter of 2016. The first-quarter 2017 results were improved as higher realized crude oil selling prices and lower operating costs and exploration expenses more than offset the change in deferred income taxes and lower production volumes.

Merrill Lynch frequently has cited the big short interest in the stock, which the Wall Street Journal pegs at 29.16 million shares, or 10.4% of the float. The analyst also points to the 60 million barrels oil equivalent per day growth in the second half of 2017, which should drive free cash flow from 2018.

Shareholders receive a 2.02% dividend. The whopping $80 Merrill Lynch target price compares with the consensus target of $63.13. Shares closed Wednesday at $49.51.

Newell Brands

This is a top consumer goods stock, and given the big sell-off in the shares since last August, it may be offering investors an outstanding value at current levels. Newell Brands Inc. (NYSE: NWL) is a manufacturer and marketer of consumer products has six reporting segments, including the recently acquired Jarden.

The segments are: Writing (Sharpie, Paper Mate, Waterman, Parker), Home Solutions (Rubbermaid, Calphalon, Goody), Tools (Irwin, Lenox), Commercial Products (Rubbermaid Commercial Products, Rubbermaid Healthcare), Baby & Parenting (Graco, Aprica) and Jarden (with 120 brands including Yankee Candle, Jostens, Oster, Sunbeam, Mr. Coffee, K2, Marmot, Rawlings, Coleman and First Alert).

The stock is down around 15% from its mid-August highs, and Merrill Lynch believes value triggers remain underappreciated, with a likely sales acceleration possible. Top Wall Street analysts see upside from cost synergies, more acquisitions and portfolio rationalization that could drive operating margins and the multiple. The company is expected to report first-quarter results in early May.

Investors receive a 1.57% dividend. Merrill Lynch has set its price target at $55, but the consensus price objective is set higher at $57.29. Shares closed at $49.06.

The market is tired, and we really could use the pause that refreshes. With May right around the corner, it makes sense to move to companies where the valuation is more reasonable.