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Yields Plunge After Inflation Report: These 7 'Strong Buy' Stocks Have Huge Dividends

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In a logical world, one would think that, with the Federal Reserve raising interest rates all year long, rates across the entire Treasury yield curve would be headed higher. Yet, just the opposite has occurred. Since the middle of June, the yields on the benchmark 10-year note and 30-year bond have dropped a stunning 23%. In fact, with federal funds now at 2.25% to 2.50%, the 10-year note is only 28 basis points higher.

Why is this happening? The biggest for this is that the bond market senses that a recession, if not here now despite the empirical data that says it is, is certainly on the way, and it could be very ugly. Add in the fact that the “peak inflation” narrative was strengthened by the lower than expected consumer price index numbers this week, once again sent buyers into the Treasury markets, driving rates lower yet again.
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So what are income investors to do? Look for quality stocks that can survive in a turbulent market and that pay big dividends. We screened our 24/7 Wall St. research database for quality companies that, while perhaps off the radar, offer solid upside and dependable dividends. Plus, all are rated Buy across Wall Street.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Altria

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 an 8.05% dividend. Deutsche Bank has a $46 target price on Altria stock. The consensus target is higher at $49.54, and shares closed on Wednesday at $44.74.

Best Buy

The need for the electronics and gear to set up a “work from home” office has been a huge tailwind for this leading retailer, and what started as a pandemic necessity has turned into a trend. Best Buy Inc. (NYSE: BBY) is a top specialty retailer of consumer electronics in the United States and Canada. As of January 30, 2022, it had 1,144 stores.

Those stores provide computing products, such as desktops, notebooks and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products.

Its stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers and vacuums; entertainment products consisting of drones, peripherals, movies, music and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living and sporting goods.
In addition, Best Buy provides consultation, delivery, design, health-related, installation, memberships, repair, set-up, technical support and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, CST, Current Health, Geek Squad, Lively, Magnolia, Best Buy Mobile, Pacific Kitchen, Home, and Yardbird banners.

Best Buy stock comes with a 4.48% dividend. The Guggenheim price target is $85, while the consensus target is $77.85. The shares closed on Wednesday at $78.51.
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Gladstone Commercial

This stock was hit hard as interest rates charged higher and is offering the best entry point in over a year. Gladstone Commercial Corp. (NASDAQ: GOOD) is focused on acquiring, owning and operating net leased industrial and office properties across the United States.

As of June 30, 2021, Gladstone owns a diversified portfolio of 121 office and industrial properties located in 27 states and leased to 106 tenants. The company has grown the portfolio in a consistent, disciplined manner at a rate of 18% per year since the IPO in 2003. It matches long-term leased properties with long-term debt to lock in the spread to create a durable, stable cash flow stream to fund monthly distributions to shareholders. Current occupancy stands at 96.5% and occupancy has never dipped below 95.0% since the IPO.

Most importantly for investors, Gladstone has a track record of success, as exhibited by a history of strong distribution yields, consistent occupancy greater than 95.0%, and 10+ years of paying continuous monthly cash distributions.

Investors receive a 7.44% distribution. The $23 B. Riley Securities price target compares with the $23.60 consensus target. Gladstone Commercial stock closed on Wednesday at $20.23.

Lumen Technologies

This under-the-radar stock has big total return potential. Lumen Technologies Inc. (NYSE: LUMN) is a facilities-based technology and communications company that provides various integrated services and solutions under CenturyLink name to business and residential customers in the United States and internationally.

The company operates offers IP and data services, including VPN data network, Ethernet, internet protocol (IP), and content delivery services. It also offers transport and infrastructure services comprising high bandwidth optical networks; unlit optical fiber networks, and related professional and management services; private line services, a direct circuit or channel specifically dedicated for connecting two or more organizational sites; colocation and data center services; and consulting services, which include network management, installation and maintenance of data equipment, and building of proprietary fiber-optic broadband networks for government and business customers.

Investors receive a 9.18% dividend. The Lumen Technologies stock price target at Wells Fargo is $12. The consensus target is $10.36, and the stock closed on Wednesday at $10.89.

ONEOK

The solid price of natural gas over the past year has helped to lift this top energy company. ONEOK Inc. (NYSE: OKE) primarily engages in natural gas transportation, storage and natural gas and NGLs gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying MLP, ONEOK Partners.
The company has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which analysts feel provides high-return growth opportunities.

Many on Wall Street remain quite positive on ONEOK’s primarily fee-based earnings, which account for 90% of total earnings.
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ONEOK stock investors receive a 6.01% dividend. Raymond James has set a $75 price target. The lower consensus target is $69.25, and shares closed on Wednesday at $62.26.

Simon Property

Shares of this leading company have been pounded and are offering the best entry point since last year. Simon Property Group Inc. (NYSE: SPG) is a very strong company for investors looking to play the industry. It invests in real estate markets across the globe. It engages in investment, ownership, management and development of properties. The company primarily invests in regional malls, premium outlets, mills and community/lifestyle centers to create its portfolio.

Through its subsidiary partnership, Simon Property owns or has an interest in about 230 properties in the United States and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

Shareholders receive a 6.28% distribution. Morgan Stanley’s price target of $133 compares with a $126.40 consensus target, and Simon Property Group stock ended trading on Wednesday at $111.38.

Vornado Realty Trust

Sporting a sizable dividend and offering investors a great inflation-hedging real estate play, this top stock is an incredible buy now. The Vornado Realty Trust (NYSE: VNO) portfolio is concentrated in the nation’s key market New York City, along with additional premier assets in both Chicago and San Francisco. It is the real estate industry leader in sustainability policy, owning and managing over 23 million square feet of LEED-certified buildings.

The company posted very solid results last week, as funds from operations (FFO) and revenues beat Wall Street estimates. Another very positive metric for the company was that, on a year-over-year basis, FFO per share and revenues grew 20.3% and 19.7%, respectively.

Vornado investors receive a 7.23% distribution. The Truist Financial target price is $34. The consensus target for Vornado Realty Trust stock is $31.90. The shares closed almost 4% higher on Wednesday at $29.26.


These seven stocks should hold up better in a massive sell-off than high-beta momentum stocks will. They all provide goods and services that are needed or wanted almost regardless of prevailing economic conditions, and all are very strong players in their respective sectors.

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