Investing

Merrill Lynch Makes a Stunning Energy Addition to US 1 List for 2020

Mondelez

This consumer sector giant makes good sense for conservative accounts. Mondelez International Inc. (NASDAQ: MDLZ) manufactures and markets snack food and beverage products worldwide. It offers biscuits, including cookies, crackers and salted snacks; chocolates, and gums and candies; powdered beverages and coffee; and cheese and grocery products.

Its primary brand portfolio includes LU, Nabisco and Oreo biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolates; Trident gum; Jacobs Kaffee; and Tang powdered beverages.

Mondelez sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets through direct store delivery, company-owned and satellite warehouses, distribution centers and other facilities, as well as through independent sales offices and agents.

Mondelez shareholders receive a 2.11% dividend. Merrill Lynch has set its price target at $61. The posted consensus target price is $61.16, and the shares closed most recently at $53.93.

Target

This remains a solid and safe retail total return play, and the company recently posted blowout results. 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.

Over the past couple of years, Target has poured tons of money into its e-commerce offerings, overhauling its stores and refreshing its inventory to compete better 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.

Solid numbers and a very positive analysts day had the Merrill 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, and it could be a big winner this holiday selling season.

Shareholders of Target receive a 2.10% dividend. Merrill Lynch’s price objective is $150. The posted consensus target is much lower at $136.21, and the stock closed Wednesday at $125.80 per share.

One new addition to the vaunted US 1 list and four additional ideas that offer solid growth and dependable dividends. Given the big market moves this year, it may be wise to buy partial positions and see if the new year doesn’t bring a small pullback.