Merrill Lynch's 4 Contrarian Blue Chips to Buy That Yield 4% or More


This company also was recently added to the Merrill Lynch US 1 list. Qualcomm Inc. (NASDAQ: QCOM) designs, develops and supplies semiconductors and collects royalties on wireless handheld devices and infrastructure based on its dominant position in CDMA and other related technology patents.

In addition, Qualcomm provides systems software and components to wireless handset vendors and promotes applications and services that run on high-speed wireless networks. The company operates primarily through two segments: CDMA Technologies and Technology Licensing.

The company ended up finishing the fiscal second quarter with a positive earnings surprise, reporting earnings of $0.80 per share, compared to the $0.70 per share expected by analysts. The company generated $5.23 billion in revenue, compared to $5.19 billion expected by Wall Street.

The company has had a plethora of headline issues, not the least of which was a proposed buyout by Broadcom that the government put the kibosh on. That is in addition to ongoing issues with Apple that have kept a lid on the share price.

Shareholders of Qualcomm are paid a very hefty 4.91% dividend. The $75 Merrill Lynch price target is well above the consensus target of $69.98. The stock closed at $50.47 on Thursday.


This top telecommunications company has been among the worst performing Dow Jones industrial average stocks for much of this year, with shares still down over 10%. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world.

Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

The company reported better-than-expected first-quarter results last Tuesday, as the wireless carrier lost fewer monthly phone subscribers than feared and the company’s chief financial officer said it was continuing to explore a new video service. On an adjusted basis, the company earned $1.17 per share. Total operating revenue rose to $31.77 billion from $29.81 billion a year earlier.

Despite the stellar numbers, investors yawned and the stock continued to trade lower. An earnings miss by rival AT&T did not help other.

Verizon investors are paid an outstanding 4.74% dividend. Merrill Lynch has set its price target at $58, The posted consensus target is $55.88, and the stock closed trading on Thursday at $49.50 per share.

These four quality companies all came in with solid reports but their shares continue to be sold off by investors. While nobody can be sure if they will trade lower, they all offer good long-term value for patient investors willing to collect dividends until their fortunes reverse.