Procter & Gamble
The company offers a very solid dividend and safety as the consumer staples sector makes sense now. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies, and it operates in five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby & Family Care. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.
The company actually is innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends.
Procter & Gamble shareholders are paid a 2.81% dividend. The $110 Merrill Lynch price target compares with the $98.07 consensus price objective and the share price of Wednesday’s close of $102.90.
This stock remains a solid and safe retail total return play now. Target Corp. (NYSE: TGT) is one of the largest discount retailers in the United States, operating roughly 1,800 Target stores across the country. The company sells merchandise in its Signature Categories Style, Baby, Kids and Wellness, as well as other products in both physical Target stores and online at Target.com.
Since 2017, Target has poured tons of money into its e-commerce offerings, overhauling its stores and refreshing its inventory to better compete against Amazon. Target has even embraced the same-day delivery concept and is expanding retail floor space for toys as it looks to scoop market share after the closing of Toys “R” Us.
Solid numbers and a very positive analysts day had the Merrill Lynch analysts noting that they believe the company’s ability to moderate fulfillment costs through its “stores as hubs” model should drive margin improvement in fiscal 2020. They also feel the valuation is compelling at current levels.
Shareholders of Target are paid a stellar 3.26% dividend. Merrill Lynch has set its price objective at $100. That compares to the much lower consensus target of $85.73. The stock closed most recently at $79.82 a share.
This top energy company is also a solid pick for more conservative accounts. Williams Companies Inc. (NYSE: WMB) is now largely a pure-play domestic natural gas infrastructure company that has a 74% ownership interest in its underlying master limited partnership, Williams Partners.
The company has a lower risk, fee-based business model with some volume sensitivity. Natural gas demand continues to be driven by liquefied natural gas (LNG) exports, power generation and industrials. In addition to steady demand growth, Marcellus production and associated gas in the Permian are expected to continue to be primary supply drivers.
Williams Companies shareholders are paid a very sizable 5.30% dividend. The Merrill Lynch price target is $31. The analysts’ consensus estimate is $31.94, while the shares were last seen on Wednesday changing hands at $28.49.
These are five outstanding ideas from the US 1 team at Merrill Lynch, who are decidedly more conservative than some of the other members. Given their strong and consistent dividends, these picks offer investors excellent total return potential and a safer way to play the stock market going forward in 2019.