All the top Wall Street firms that we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the companies they not only like on a longer term basis but stocks that usually have big upside to the assigned target price. With the fourth quarter all but over, many analysts have tweaked their lists of top stocks to buy to account for continued changes for the closing weeks of this year and into 2022.
We screened UBS U.S. Equity Sector Strategists Top Picks list looking for the companies that pay solid dividends and also are strong plays in a very inflationary world. All six stocks we found make good sense for growth stock investors looking to add a dividend kicker to increase total return potential. Remember that no single analyst report should be used as a sole basis for any buying or selling decision.
American Electric Power
This industry-leading utility is also a solid dividend-paying company. American Electric Power Co. Inc. (NYSE: AEP) is one of the largest electric utilities in the United States, delivering electricity to more than 5.4 million customers in 11 states.
The company ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the United States. It also owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.
Many on Wall Street feel that the stock trades at a discount to its utility peers, and they feel it deserves a premium. Top analysts also think the company may sell generating assets and buy back shares with the proceeds, which also will be accretive.
American Electric Power stock investors receive a 3.74% dividend. The UBS analysts have a $101 price target, while the consensus target is $96.10. Shares closed on Tuesday at $96.10.
This remains a top Warren Buffet holding and offers not only safety but also an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.