Investing

5 Hard-Hit Dow Stocks Have Monster Upside and Come With Great Dividends

IBM

This blue chip giant still offers investors an incredibly solid entry point and very good forward earnings potential. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of information technology (IT) hardware, business and IT services, and a full suite of software solutions. The company integrates its hardware products with its software and services offerings in order to provide high-value solutions.

Analysts have cited the company’s potential in the public cloud as a reason for their positive outlook going forward. The cloud proved to be big in recent earnings reports, as did Red Hat, the software giant the firm bought in 2019. Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation and industry expertise and sales leadership in more than 175 countries.

Investors receive a 5.43% dividend. The huge $172 BofA Securities price target towers over the $150.84 consensus target for IBM stock. Thursday’s closing print was $120.85.

Verizon

Shares of this top telecommunications company offer tremendous value at current levels. Verizon Communications Inc. (NYSE: VZ) is one of the largest U.S. telecom companies. It provides wireless and wireline service to retail, enterprise and wholesale customers.

The company’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Verizon’s wireline business has undergone a period of secular decline due to wireless substitution and cable competition.

Verizon acquired AOL and Yahoo to create the Oath digital content platform, which the company recently sold at a sizable loss to Apollo Global Management for $5 billion. The sale allows Verizon to offload properties from the former internet empires, though it will keep a 10% stake in the company and it will be rebranded to just Yahoo.

Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

The dividend yield is 4.94%. Goldman Sachs has set a $64 price objective. The consensus target is $60.15, and Verizon Communications stock closed on Thursday at $51.85 a share.


These five outstanding blue chip stocks have been hit hard this year and are offering growth and income investors incredible entry points and some big and, most importantly, reliable dividends. It’s very possible that it will take some time for some of them to get back on track and return to favor across Wall Street. However, in the meantime, the big dividends these blue chip firms pay investors to be patient are well worth it.

For those versed in options trading, these all offer some nice premiums for covered call writing, which also can increase the total return potential, especially for those with a long-term investment horizon.

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