Recently, the risk-off crowd has pushed the market higher following some stellar third-quarter earnings. Despite the gains, many investors are increasingly worried about a big sell-off ahead. Given the massive move since the market lows of March 2020, and the fact that we just recently had a 5% decline for the first time in almost a year, many get the sense that it is time to move to safer stocks that still have growth potential going forward but also pay a solid dividend that is dependable.
Despite some hand-wringing over higher interest rates, they remain near generational lows across the board. It is unlikely the Federal Reserve starts to increase rates for another year or perhaps longer.
We decided to screen the Goldman Sachs European Conviction List, which is a collection of the top equity ideas across the pond at the firm, looking for stocks that paid solid and dependable dividends that were higher than the S&P 500 yield of 1.31%. We found five that look like outstanding total return ideas now. They all are positioned well for the rest of 2021 and beyond, and importantly, they trade on American exchanges. We took the Goldman Sachs price target in the local currencies and converted it to U.S. dollars if no domestic price target was quoted.
It is important to remember that no individual research report should be used as the basis for any buying or selling decision.
ABB
Based in Switzerland, this is an ideal stock for more conservative investors. ABB Ltd. (NYSE: ABB) manufactures and sells electrification, industrial automation and robotics and motion products for customers in utilities, industry, transport and infrastructure worldwide.
Its Electrification segment provides electric vehicle charging infrastructure, renewable power solutions, modular substation packages, distribution automation products, switchboard and panel boards, switchgears, UPS solutions, circuit breakers, measuring and sensing devices, control products, wiring accessories, enclosures and cabling systems and intelligent home and building solutions for integrating and automating lighting, heating, ventilation, security and data communication networks.
The company’s Robotics & Discrete Automation segment provides industrial robots, software, robotic solutions and systems, field services, spare parts and digital services. This segment also offers solutions based on its programmable logic controllers, industrial PCs, servo motion, transport systems and machine vision.
The Industrial Automation segment develops and sells industry-specific, integrated automation, and electrification systems and solutions, as well as digital solutions, lifecycle services and artificial intelligence applications for the process and hybrid industries. This segment also offers process and discrete control technologies, advanced process control software and manufacturing execution systems, sensing, measurement, analytical instrumentation, electric ship propulsion systems and large turbochargers, as well as remote monitoring, preventive maintenance, asset performance management and cybersecurity services.
Shareholders receive a 1.93% yield. The Goldman Sachs price target on ABB stock in Swiss francs equals $52.14 in U.S. dollars. The Wall Street consensus target is much lower at $38.16, and shares closed on Wednesday at $35.04.
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