Even though the market and practically everybody in the universe knows that interest rates will be going higher, with perhaps two more increases this year and three next year, rates in the Treasury market have gone nowhere. In fact, the yield on the 30-year Treasury bond, which is at a 3.04%, is lower than it was back in December. While great for those looking for a mortgage, it’s still been tough for those looking to get dividend income.
We decided to look and see if there were some solid stocks that were paying good dividends and trading at reasonable levels. We screened our 24/7 Wall St. research database and found five companies that had at least two Buy ratings at major firms on Wall Street. All of them pay dividends more than 5%.
CenturyLink
This is the largest of the rural local exchange carriers and is expected to continue get a large dose of government money to provide continuing internet service in rural areas. CenturyLink Inc. (NYSE: CTL) is a global communications, hosting, cloud and IT services company enabling millions of customers to transform their businesses through innovative technology solutions.
CenturyLink offers network and data systems management, Big Data analytics and IT consulting, and it operates more than 55 data centers in North America, Europe and Asia. The company provides broadband, voice, video, data and managed services over a robust 250,000-route-mile U.S. fiber network and a 300,000-route-mile international transport network.
Back in March, shareholders of CenturyLink and Level 3 Communications approved their merger by overwhelming majorities. Level 3 shareholders voted for the deal with an 81.2% majority (98.8% of the votes cast), while CenturyLink shareholders voted for the merger with 96.3% of the votes cast. Wall Street loves this deal, and the synergies the two have combined are very strong.
CenturyLink investors receive an 8.6 % dividend. JPMorgan rates the stock a Buy and its price target is $38. The Wall Street consensus price objective is $27.15. The stock closed trading on Wednesday at $25.11.
Kohl’s
This top retailer has traded sideways for months but has posted decent 2017 sales. Kohl’s Corp. (NYSE: KSS) operates department stores in the United States that offer private label, exclusive and national brand apparel, footwear, accessories, beauty and home products to children, men and women customers. The company also sells its products online at Kohls.com and through mobile devices.
While retail chains have suffered from internet pressure, Kohl’s has held its own as consumers see the company as a solid discount retailer. Merrill Lynch said this in a recent report:
Corporate Initiatives: new brands, convert loyalty members to credit cardholders, personalization, win market share from store closures. View on store closures is to keep the majority of its fleet open to defend market share/maintain relevance to the customer. Recent launch of Under Armour has exceeded expectations so far.
Shareholders receive a 5.46% dividend. Merrill Lynch has a $50 price target for the Buy-rated stock, and the consensus target is $42.57. The shares closed most recently at $40.32.
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