This higher-yielding stock also may have among the best total return potentials. FirstEnergy Corp. (NYSE: FE) is a conglomerate of 10 electric utilities, including Ohio Edison, Cleveland Electric Illuminating, Pennsylvania Power, Toledo Edison, Jersey Central Power & Light, Metropolitan Edison and Pennsylvania Electric.
FirstEnergy is dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company’s transmission subsidiaries operate more than 24,500 miles of transmission lines that connect the Midwest and Mid-Atlantic regions.
Shareholders receive a 3.44% dividend. The $51 Merrill price objective is higher than the $47.53 consensus price target. The stock was trading most recently at $44.68.
This is the largest refiner in the United States and a much more conservative way to play energy. Marathon Petroleum Corp. (NYSE: MPC), one of the largest independent petroleum refining and marketing companies in the United States, is based in Findlay, Ohio. It owns seven refineries in the United States with total throughput capacity of around 1.7 million barrels per day.
The company operates approximately 2,750 retail sites under the Marathon and Speedway brands. In addition, it operates a logistics network of pipelines, barges, trucks and terminals that store and transport crude and products.
The company bought rival refining giant Andeavor last year for $23.3 billion in the biggest-ever deal for an oil refiner, creating the largest independent fuel maker in the United States. It was one of the biggest mergers in 2018.
Following the deal, Marathon became the largest operator of refining capacity in the United States, and management believes the company can achieve the $1 billion in synergies that it suggests. In addition, many on Wall Street give the company no credit for the possible International Maritime Organization change, which implies additional potential upside.
Shareholders receive a 4.5% dividend. RBC has set its price target at $66. The consensus target is up at $78.94, but the shares ended the week at $46.22.
While the fast-food giant does a ton of business overseas, it 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, and it is one of the most valuable brands in the world.
The company reported second-quarter 2019 adjusted earnings per share that matched the Wall Street consensus estimate. Up 6.5%, global comparisons beat some estimates, with strong performance across the board, including the United States, which was up 5.7%. Wall Street analysts expects strong performance for McDonald’s to continue as strong comps support store level returns, accelerating net store growth.
McDonald’s offers a 2.11% dividend yield. The Goldman Sachs price target is $250. The consensus price objective is $231.54, and shares closed trading at $218.47.
The bottom line is that despite the markets tendency to rally on any scrap of good news, we remain in very volatile waters, and the likelihood of a deal with China remains questionable. With rates going lower, income-starved investors should be returning to these top companies, and nervous investors should hop on-board as well.
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