Investing
5 High-Yielding Dividend Aristocrat Stocks Are Perfect Now for Worried Investors
March 26, 2021 7:46 am
Last Updated: March 26, 2021 7:49 am
With March almost over, many investors are looking to the second quarter and beyond. While there is some hope that a return to normal could be achieved by the summer, one thing is for sure. The stock market is very overbought, and some of the momentum stock trades are very crowded and have been hit hard. With interest rates remaining very close to generational lows, top-quality dividend stocks may be the way to go for the rest of 2021.
Often when income investors look for companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 65 companies that made the cut for the 2021 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. Keep in mind that, just because they are on this list now, it doesn’t mean in the future they won’t be forced to reduce their dividend.
We decided to screen the Dividend Aristocrats list looking for companies in sectors that are in demand, or stock in sectors that are perhaps out of favor but look like good ideas for the rest of 2021. Five stocks hit our screens, all of which are Buy rated at top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This is a top telecom and entertainment play. AT&T Inc. (NYSE: T) is the largest U.S. telecom company and provides wireless and wireline service to retail, enterprise and wholesale customers. The company’s wireless network serves approximately 124 million mobile connections, with 77 million postpaid subscribers.
While AT&T’s traditional wireline voice business has undergone a period of secular decline due to wireless substitution and cable competition, the company through WarnerMedia has become a diversified media and entertainment business.
In an attempt to lower its large debt load, AT&T recently agreed to sell a stake in its pay-TV unit to private-equity firm TPG and carve out the struggling business, pulling the telecom giant back from a costly wager on entertainment. The transaction would move the DirecTV and AT&T TV services in the United States into a new entity that will be run jointly by the new partners. AT&T will retain a 70% stake in the business. TPG will pay $1.8 billion in cash for a 30% stake.
Investors receive a 6.91% dividend. BofA Securities has a $36 price target for the shares, while the Wall Street consensus target is $29.55. AT&T stock closed trading on Thursday at $30.08 a share.
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