Investing

Why BofA Securities Income and Growth Portfolio Stocks May Be the Best 2021 Picks

Citigroup

This top bank stock has been trading at some of the lowest levels since 2016, and it is on the BofA Securities US 1 list. Citigroup Inc. (NYSE: C) has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.

Trading at a still very cheap 7.2 times estimated 2020 earnings, Citigroup stock looks very reasonable in what remains a volatile market and in a sector that has lagged dramatically.

Note that there is the potential for a consent order to be placed against the bank as federal regulators potentially weigh taking actions against Citigroup over deficiencies in the bank’s risk and control functions. That has weighed heavily on shares, perhaps offering even more opportunity.

The Federal Reserve Board recently announced an enforcement action against Citigroup that requires it to correct several longstanding deficiencies. The bank has been slapped with a $400 million penalty by the Office of the Comptroller of the Currency for longstanding deficiencies in its risk management and internal controls processes. Both the OCC and the Federal Reserve have accused the bank of failing to implement effective risk and internal controls measures that complement its size, complexity and risk profile.

While this action may seem harsh, for interested investors who have been waiting for the judgment and penalties, it should take some weight off the stock as it does not seem overly punitive to the bank.

Investors receive a 4.56% dividend. The $74 BofA Securities price target is well above the $65.72 consensus target. Citigroup stock closed at $44.72.

Home Depot

This remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself, do-it-for-me and professional customers.

With consumer retail floor traffic picking up since Labor Day, and the holiday shopping season already well underway, shares of Home Depot make sense for investors looking for a retail idea that stays in favor all year long. The home improvement giant is a solid addition to growth and income portfolios.

Shareholders receive a 2.11% dividend. BofA Securities has set a giant $330 price target. The consensus target is $302.72, and Home Depot stock was last seen at $284.52.

Lockheed Martin

This is one of the top aerospace and defense stocks to buy, and many on Wall Street are expecting a very solid continuation of U.S. and foreign defense spending in 2021. Lockheed Martin Corp. (NYSE: LMT) researches, designs, develops, manufactures, integrates, operates and sustains advanced technology systems, products and services. It also provides a wide range of defense electronics products and IT services.

Being the Pentagon’s prime contractor, Lockheed Martin offers a diverse portfolio of global aerospace, defense, security and advanced technologies. Its leveraged presence in the Army, Air Force, Navy and IT programs guarantees a steady inflow of follow-on orders, not only from the U.S. government but also from many foreign allies of the nation.

Investors receive a 2.68% dividend. The BofA Securities price objective is $500. The consensus figure is $435.95, and Lockheed Martin stock closed most recently at $388.59.


These five large-cap leaders are priced right, pay solid and dependable dividends and look to be well positioned for 2021, regardless of who wins the presidential election. In addition, they are all attractively priced in a market that is overbought and probably could use a 10% correction.