To many investors, this may seem like a virtual replay from times past. The Federal Reserve resorted to a tactic not used since 1995 when it lowered interest rates 25 basis points at the end of July. Still, the economy is still in solid shape and unemployment is at the lowest levels in 50 years.
The bottom line is that with much European sovereign debt trading with negative rates, demand may continue for U.S. Treasury debt, pushing yields even lower, as evidenced by the 10-year Treasury hitting a three-year low yield and the 30-year Treasury bond trading at an all-time low yield.
With super-safe Treasury debt way overbought and too expensive, very secure dividend stocks are the way to go now, and we found five that look very solid and various Wall Street firms that we cover here at 24/7 Wall St. have Buy or equivalent ratings of them.
This is a very safe way for investors looking for income, and it is on the Merrill Lynch US 1 list. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV. The company has 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 shares trading at a very cheap 9.4 times estimated 2019 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 solid operating results in the second quarter, including consolidated revenue growth, expanding operating income margin and record operating and free cash flow. AT&T’s consolidated revenues for the second quarter totaled $45.0 billion, up 15.3% from a year ago, primarily due to the Time Warner acquisition.
Declines in revenues from legacy wireline services, Vrio, domestic video and wireless equipment were more than offset by the addition of WarnerMedia and growth in domestic wireless services, strategic and managed business services, IP broadband and Xandr.
AT&T shareholders receive a 5.95% dividend. Merrill has a $37 price target on the shares, and the Wall Street consensus target is $34.54. The shares were trading on Friday’s close at $34.97.
This company remains a top Warren Buffet holding and offers not only safety but also an incredibly strong worldwide brand. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. With coolers getting packed for picnics, parades and vacations you can bet that they will be stuffed with products from this iconic American company. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Coca-Cola investors receive a 2.97% dividend. Merrill has a $60 price target, while the consensus target is $57.22. The stock closed at $54.41 on Friday.