If it seems as though 2018 is ripping by fast, you aren’t mistaken — it is. With summer just over a month away, and the traditional vacation season just around the corner, investors can also look forward to slow June through August trading, where often the bears will sneak in and take advantage of low trading volumes. One good idea may be to take some profit on winners and look for some contrarian ideas that could have solid upside and a degree of safety.
We screened our 24/7 Wall St. research universe looking for quality stocks that have taken a hit this year, that are Buy rated, and also pay good dividends. We found four companies that could be great summer selections, and good stocks to hold for the balance of the year.
This company has been absolutely hammered and may be a great total return play. 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 9.4 times estimated 2018 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.
AT&T reported first-quarter results that missed consensus estimates, sending its shares down sharply in April, as it lost subscribers to its satellite and U-verse services. Despite the hit, the company still generates solid and dependable earnings and dividends.
AT&T shareholders are paid rich 6.22% dividend. The analysts at Jefferies rate the stock a Buy and have a $40 price target. That compares with the Wall Street consensus target of $38.35. The shares are trading Friday morning at $32.10.
This maker of tobacco products and wine has been hit hard and offers value investors a great entry point. Altria Group Inc. (NYSE: MO) is a top mega-cap consumer discretionary stock to buy on Wall Street, and the company’s Marlboro brand remains one of the most recognizable in the world. Many Wall Street analysts concede that the stock has solid downside support owing to the generous dividend yield, which remains at a huge premium in relation to the 10-year Treasury rate.
Cash flow generation and the return of cash to Altria shareholders remain key facets of the company’s total shareholder return, and the analysts expect support of the strong dividend, which they believe will continue to climb along with strong share repurchase activity. The board also raised the dividend by 8.2% in 2017.
To diversify away from cigarettes and cigars, Altria has expanded its portfolio into new categories like wine, e-cigarettes and a 27% stake in brewer SABMiller.
Even though Altria released earnings for its first quarter that rose from the same period last year, the stock was hit sank to a 52-week low.
Altria investors are paid a hefty 5.02% dividend. The Merrill Lynch has set a $70 price target on this Buy-rated stock, and the consensus estimate is $70.38. The stock traded Friday morning at $56.15.