Investors love dividend stocks. They not only provide dependable income, but they also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over time. 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 seven that look like great ideas for income-oriented investors searching 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.
This maker of tobacco products offers value investors a great entry point now as it has been hit 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 2008, it spun off its international cigarette business to shareholders. The stock was pounded recently, as last month the U.S. Food and Drug Administration announced the ban of all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is focused on selling its nicotine products to teenagers. A court has granted Juul’s request for a stay on the ban, allowing the company to still sell the products while an appeal is made on the decision.
While this gets sorted out, it is a good bet that investors will still receive a giant 8.61% dividend. Deutsche Bank has a $46 target price on Altria stock. The consensus target is higher at $52.33. The shares closed Thursday at $41.81.
The legacy telecommunications company has been going through a long restructuring, has lowered its dividend and has sold off or merged underperforming assets. AT&T Inc. (NYSE: T) provides telecommunications, media and technology services worldwide.
The Communications segment offers wireless voice and data communications services and sells handsets, wireless data cards, wireless computing devices with carrying cases and hands-free devices through its own company-owned stores, agents and third-party retail stores.
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