With Long Bull Market Almost Over, Time to Rotate to Safety and Income

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Exxon Mobil

This remains a top Wall Street energy pick, and it is on the US 1 list at Merrill Lynch. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

The company also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

The company posted strong third-quarter results, and the Merrill Lynch analysts noted this.

Solid quarter with earnings and cash flow beat on the downstream segment. Production beat looks like it is on Permian growth which we view as underappreciated aspect to the company’s story. All-in-all, we see the quarter as a welcome start to management plans to double cash flow by 2025 and retain our Buy rating.

Shareholders of Exxon are paid a very solid 4.34% dividend. The $108 Merrill Lynch price objective compares with the $89.42 consensus target price. The shares ended trading on Friday at $75.49.

McDonald’s

The fast-food giant does a ton of business overseas but 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 food-service retailer with over 37,000 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 men and women.

McDonald’s shares have been positive recently as menu price increases and global growth fueled a strong third-quarter earnings report. McDonald’s beat earnings on the top and bottom line, and the company posted its 13th consecutive quarter of positive same-store sales growth.

McDonald’s shareholders are paid a nice 2.53% dividend. Merrill Lynch has set its price target at $200. The posted consensus price objective is $192.74, and the shares closed Friday at $181.93.

Pfizer

This top pharmaceutical stock made a gigantic splash last year with a $5.5 billion purchase of Anacor Pharmaceuticals. Pfizer Inc. (NYSE: PFE) is a global biopharmaceutical company with a diversified portfolio of products and pipeline candidates, and it is one of the largest pharmaceutical companies in the world as measured by market capitalization and revenue. It also is a component of the Dow Jones industrial average.

The company’s commercial operations are bifurcated into two business segments: Innovative Health, which focuses on the development and commercialization of medicines and vaccines, as well as consumer health care products, in various therapeutic areas, and Essential Health, which offers branded generic products, biosimilars, anti-infectives and other products without marketing patent protection.

Pfizer investors are paid a very solid 3.15% dividend. The Merrill Lynch price objective is $47. That compares with the consensus price target of $43.79 and the most recent close at $43.14 a share.

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These five Buy-rated safe companies all carry Merrill Lynch’s best volatility risk rating and pay dependable dividends. They offer reasonable entry points and are the types of companies you can sleep well at night owning.