This somewhat larger mid-cap company is actually a very solid value play. Kennametal Inc. (NYSE: KMT) develops and applies tungsten carbides, ceramics, super-hard materials and solutions for use in metal cutting and mission-critical wear applications to combat extreme conditions related with wear fatigue, corrosion and high temperatures worldwide.
The company’s product offering includes a selection of standard and customized technologies for metalworking applications, such as turning, milling, hole making, tooling systems and services for manufacturers of transportation vehicles and components, machine tools, and light and heavy machinery; airframe and aerospace components; and energy-related components for the oil and gas industry, as well as power generation.
Kennametal investors receive a 2.72% dividend. The stunning $50 Jefferies price target compares to the much lower consensus target of $36.32. The shares closed most recently at $29.25.
This top mid-cap bank makes good sense for the fourth quarter and into 2020. KeyCorp (NYSE: KEY) operates as the bank holding company for KeyBank National Association, which provides deposit, lending, cash management and investment services to individuals, small and medium-sized businesses.
The company also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets banner.
The top managers are attracted to the larger regional banks, as valuations look very reasonable and cost-saving plans are helping to make forward estimates look very achievable. With overall credit remaining solid, earnings and loan deposit and fee growth all are positive metrics for the bank.
KeyCorp offers investors a very solid 4.25% dividend. Jefferies has set its target price at $20. The posted consensus price target is slightly lower at $19.39, and shares closed Monday at $17.59.
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.
Shareholders receive a very sizable 6.58% dividend. The Jefferies price target is $32. The consensus target is $30.05, and the shares closed Monday at $23.12.
These five outstanding ideas from the mid-cap team at Jefferies are decidedly more conservative. Given their strong and consistent dividends, they offer investors excellent total return potential and a safer way to play the stock market for the rest of 2019 and into next year.