When April ends in a little more than a week, we will officially be a third of the way through what has been for the most part a very dismal 2022 for investors. The combination of rising interest rates, surging inflation (which is at 40-year highs), continued warfare in Ukraine and a host of additional issues have kept a lid on stock prices. Every move higher seems to be followed by another big leg down, like we saw on Thursday. While we are well off the lows printed in late February and early March, there does not appear to be any near-term catalyst to drive stocks higher in a meaningful way.
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It makes sense now to stay clear from the momentum and meme stocks and look to more conservative large-cap stocks that pay dividends. We screened the Dow Jones industrial average looking for the highest yielding companies in sectors that look to benefit in the coming months, those that likely will hold their ground if we get another major move lower.
The following five stocks are rated Buy at major Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Dow
This stock certainly offers investors growth and income potential. Dow Inc. (NYSE: DOW) is a leading materials science company and was formed from the merger of Dow and DuPont in 2017 and the subsequent spin-off 2019. The company is organized into three principal divisions: Performance Materials & Coatings (23% of EBITDA), Industrial Intermediates & Infrastructure (27%) and Packaging & Specialty Plastics (51%).
Dow’s segments include Agricultural Sciences, which is engaged in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils. The Consumer Solutions segment consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses.
The Infrastructure Solutions segment consists of Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers and Infrastructure Solutions-Silicones businesses. Performance Materials & Chemicals consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses. The Performance Plastics unit consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses.
Investors Dow stock in receive a 4.15% dividend. Piper Sandler started coverage on the stock earlier this year. Its $78 price objective is well above the $65.43 consensus target. Thursday’s close of $69.51 was up almost 3% in an ugly market.
IBM
This blue-chip giant still offers investors an incredibly solid entry point. 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.
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Its Software segment offers hybrid cloud platform and software solutions, such as Red Hat, an enterprise open-source solutions; software for business automation, AIOps and management, integration and application servers; data and artificial intelligence solutions; and security software and services for threat, data and identity. This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in banking, airlines and retail industries.
The Consulting segment offers business transformation services, including strategy, business process design and operations, data and analytics, and system integration services; technology consulting services; and application and cloud platform services.
The Infrastructure segment provides on-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads. It offers support services and solutions for hybrid cloud infrastructure, as well as remanufacturing and remarketing services for used equipment.
The Financing segment offers lease, installment payment, loan financing and short-term working capital financing services.
Earlier this week, the legacy technology giant posted stellar first-quarter results that beat estimates on the top and bottom lines, as the company continues to make progress on its huge restructuring initiative.
Investors receive a 4.74% dividend. Credit Suisse has a $172 price target on IBM stock. The $145.70 consensus target is closer to Thursday’s closing print of $139.85.
24/7 Wall St.3M
This top company could really benefit from continued economic pick-up, and the shares are down big this year. 3M Co. (NYSE: MMM) operates as a diversified technology company worldwide. It operates through the following four segments.
The Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; auto body repair solutions; closure systems for personal hygiene products, masking and packaging materials; electrical products and materials for construction and maintenance, power distribution and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye and fall protection solutions; and natural and color-coated mineral granules for shingles.
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The Transportation and Electronics segment provides ceramic solutions; attachment tapes, films, sound and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; and reflective signage for highway and vehicle safety.
The Health Care segment offers food safety indicator solutions; health care procedure coding and reimbursement software; skin, wound care and infection prevention products and solutions; dentistry and orthodontic solutions; and filtration and purification systems.
The Consumer segment provides consumer bandages, braces, supports and consumer respirators; cleaning products for the home; retail abrasives, paint accessories, car care DIY products, picture hanging and consumer air quality solutions; and stationery products.
Shareholders receive a 3.96% dividend. The target price at Argus is $190, while the consensus target is $163.09. 3M stock closed on Thursday at $151.77 a share.
Verizon
This top telecommunications stock offers tremendous value at current levels, and Berkshire Hathaway owns 158.8 million shares. 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.
Verizon’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Its wireline business has undergone a period of secular decline due to wireless substitution and cable competition.
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.
Investors receive a 4.71% dividend. The $71 Cowen target price is well above the $60.64 consensus target on Verizon Communications stock. Shares ended Thursday’s trading session at $55.01 apiece.
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Walgreens
This huge drugstore chain operator is a safe retail play for investors looking to add health care now. Walgreens Boots Alliance Inc. (NASDAQ: WBA) operates as a pharmacy-led health and beauty retail company. It operates through three segments.
The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides specialty pharmacy services and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States; and six specialty pharmacies.
The Retail Pharmacy International segment sells prescription drugs and health and wellness, beauty, personal care and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as online and an integrated mobile application. This segment operated 4,428 retail stores under the Boots, Benavides and Ahumada in the United Kingdom, Thailand, Norway, the Netherlands, Mexico and elsewhere, and 550 optical practices, including 165 on a franchise basis.
The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.
Investors receive a 4.10% dividend. The Walgreens Boots Alliance price target at Cowen is $50. The consensus target is up at $53.55, and shares closed at $46.81 on Thursday.
Five of Wall Street’s top stocks from among the venerable Dow Jones industrial average still offer good entry points, and all pay dependable dividends. Investors can expect more inflation and rising interest rates, and these stocks are solid ideas in what could continue to be a very tough year for stock investors. Note that all five of these Dow leaders were up Thursday on a day when all the major indexes were hit hard.
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