Investing

Why It Is Time to Sell the Rally and Buy Safe Dividend Stocks

Lee Jackson

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 businesspersons.

McDonald’s shares have been positive recently as menu price increases and global growth fueled a strong fourth-quarter earnings report. The Merrill Lynch team said this about the results:

McDonalds reported fourth quarter 2018 EPS of $1.97 ($1.82 GAAP), above our $1.90 estimate. U.S. comparisons were a bit light at up 2.3%. Capex guidance for fiscal year 2019 is $2.3 billion with just under $1 billion of that going toward 2,000 U.S. remodels.

McDonald’s shareholders are paid a nice 2.60% dividend. The $200 Merrill Lynch price target compares with a $195.77 consensus price objective, as well as the most recent closing price of $177.55 a share.

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 released its quarterly earnings data on Tuesday, January 29. The biopharmaceutical company’s reported $0.64 earnings per share for the quarter topped Wall Street’s consensus estimate by a penny.

Investors in Pfizer are paid a very solid 3.43% dividend. Merrill Lynch has set its price objective at $45. The posted consensus price objective was last seen at $43.79. The shares closed most recently at $42.44 apiece.

These four solid companies have released good earnings and pay consistent and healthy dividends, and their shares are rated Buy at Merrill Lynch. All make more sense going forward for investors getting a little nervous about what the rest of 2019 may hold.