Investors love dividend stocks because they not only provide dependable income but also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over a given period. In other words, the total return on an investment or a portfolio includes both dividend income and stock appreciation.
We screened our 24/7 Wall St. research database looking for companies in the S&P 500 that were rated Buy at major Wall Street firms that also paid the highest dividends in the venerable index. We found six that look like great ideas for income-oriented investors looking for some upside appreciation as well. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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Altria
This maker of tobacco products offers value investors a great entry point now and was hit recently as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs, and it has purchased a 45% stake in cannabis company Cronus for $1.8 billion.
The company is also rolling out its own heated and vapor products, such as Marlboro HeatSticks and IQOS, both of which are slowly expanding across the country.
The company has increased its dividend for 50 consecutive years. Shareholders now receive a 7.46% dividend. BofA Securities has a $58 target price on Altria stock, and the Wall Street consensus price target is $55.23 The shares closed on Thursday at $48.81 apiece.
Exxon Mobil
This mega-cap energy leader still offers investors an incredible entry point. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.
Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.
Stellar results for the second quarter were due in part to the company’s upstream segment net income, which came in above consensus estimates, rebounding sharply from the year-ago quarter’s pandemic-depressed lows. The upstream segment is involved in the exploration and development of oil and natural gas properties, as well as the extraction and production of crude oil and natural gas. It benefits from higher oil prices. Earnings and revenue continue to rebound as the global economy recovers from last year’s pandemic-induced shock.
Exxon Mobil stock investors receive a 6.30% dividend, which will continue to be defended. The BofA Securities price target of $90 is well above the $66.34 consensus target. The stock closed at $57.08 on Thursday.
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