Investing

BofA Securities Makes Big Midsummer Changes to US 1 List of Top Stock Picks

With the third quarter of 2021 underway and second-quarter earnings reports rolling out in a big way this week, many of the top firms we follow on Wall Street are making some changes to their lists of high-conviction stock picks for clients. With all the major indexes hitting all-time highs recently, it makes sense to examine these lists as the rest of the year could have some additional volatility as the political and geopolitical cycle could still prove to be very explosive components.

The analysts at BofA Securities are making some big changes to the firm’s US 1 List of top stock recommendations. One new pick was added, and four that have performed admirably are being removed. While the newest addition is, of course, rated Buy, another top stock is being removed still carries a Buy rating as well.

We also screened the US 1 List for the top dividend stocks, and while interest rates rebounded some from last week’s massive bond rally, they still leave much to be desired when compared to dependable growth stock dividends.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Arch Capital Group Inc. (NASDAQ: ACGL) was removed from the US 1 List but still has a Buy rating at BofA Securities. As it has been trading very close to the 52-week high, this could be a valuation call.

Progressive Corp. (NYSE: PGR) is the newest member of the US 1 List. The insurance holding company provides personal and commercial auto, personal residential and commercial property, general liability, and other specialty property-casualty insurance products and related services in the United States. It operates in three segments.

The Personal Lines segment writes insurance for personal autos and recreational vehicles (RVs). This segment’s products include personal auto insurance, as well as special lines products, including insurance for motorcycles, all-terrain vehicles, RVs, watercraft, snowmobiles and related products.

The Commercial Lines segment provides auto-related primary liability and physical damage insurance and business-related general liability and property insurance for autos, vans, pickup trucks and dump trucks used by small businesses; tractors, trailers and straight trucks primarily used by regional general freight and expeditor-type businesses and long-haul operators; dump trucks, log trucks and garbage trucks used by dirt, sand and gravel, logging and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses; as well as non-fleet and airport taxis and black-car services.

The Property segment writes residential property insurance for homes, condos, manufactured homes and renters, as well as offers personal umbrella insurance and primary and excess flood insurance. It also offers policy issuance and claims adjusting services, and it acts as an agent to place business owner’s policies, general and professional liability and workers’ compensation insurance. In addition, the company provides reinsurance services. It sells its products through independent insurance agencies, as well as directly on the internet through mobile devices and over the phone.

Shareholders receive just a 0.40% dividend. The BofA Securities price target for the stock is $126, while the consensus target is lower at $102.50. Progressive stock closed on Monday at $99.88 a share.

Here are the three highest-yielding stocks in the US 1 List.

Broadcom

This company has reported solid earnings this year and is also a big technology member of the US 1 list. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.