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 for the longer term, but those that usually have big upside to the assigned target prices.
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Since the beginning of the year, many of these firms have tweaked their lists of top stocks to buy regularly to account for continued changes in 2023. With fourth-quarter earnings reports still pouring in, we decided to screen the Jefferies Franchise List of top stock picks, looking for those with among the biggest dividends.
The following six stocks hit our screen. Despite the strong January rally, it probably makes sense for investors to take a cautious stance for the rest of the year, as there is a widespread belief that the current move higher is a result of massive short covering. While these six stocks are rated Buy at Jefferies and are the highest conviction ideas, remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Amgen
This biotech giant remains a safer way to play the massive potential growth in biosimilars. Amgen Inc. (NASDAQ: AMGN) discovers, develops, manufactures and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology and neuroscience.
The company’s products include the following:
- Enbrel to treat plaque psoriasis, rheumatoid arthritis and psoriatic arthritis
- Neulasta reduces the chance of infection due a low white blood cell count in patients with cancer
- Prolia to treat postmenopausal women with osteoporosis
- Xgeva for skeletal-related events prevention
- Otezla for the treatment of adult patients with plaque psoriasis, psoriatic arthritis and oral ulcers associated with Behcet’s disease
- Aranesp to treat a lower-than-normal number of red blood cells and anemia
- Kyprolis to treat patients with relapsed or refractory multiple myeloma
- Repatha, which reduces the risks of myocardial infarction, stroke and coronary revascularization
Shareholders receive a 3.36% dividend. Jefferies has a $325 target price on Amgen stock. The consensus target is just $270.03, and the final trade for Monday came in at $251.59 a share.
24/7 Wall St.Baker Hughes
This stock makes sense for investors looking for energy exposure via services. Baker Hughes Co. (NYSE: BKR) provides a portfolio of technologies and services to the energy and industrial value chain worldwide.
The company offers exploration, drilling, wireline, evaluation, completion, production and intervention services, as well as drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas and oilfield service companies.
Baker Hughes also provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions, as well as services related to onshore and offshore drilling and production operations. In addition, the company offers equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors and turnkey solutions, as well as pumps, valves and compressed natural gas and small-scale liquefied natural gas solutions.
Further, the company provides sensor-based process measurements, machine health and condition monitoring, asset strategy and management, control systems, as well as non-destructive testing and inspection and pipeline integrity solutions. Baker Hughes serves upstream, midstream, downstream, onshore, offshore and industrial customers.
Baker Hughes stock investors receive a 2.39% dividend. The $36 Jefferies price target compares with a $33.79 consensus target and Monday’s closing print of $31.02.
Blackstone
Shares of this top money management company make sense for more aggressive growth and income investors. Blackstone Group L.P. (NYSE: BX) is one of the largest global alternative asset managers. Blackstone manages investments and provides services across four operating segments: Private Equity, Real Estate, Credit and Hedge Fund Solutions.
Blackstone launches and manages private equity funds, real estate funds, funds of hedge funds and credit-focused funds for its clients. It invests in private equity, public equity, fixed-income and alternative investment markets. Jefferies noted this when discussing the company:
Blackstone Group has been steadily building out longer-duration permanent capital vehicles, to add earnings stability and higher multiple fee-paying assets under management. Corporate management reiterated its fiscal year 2020 and 20201 free related earnings targets, and we think the current environment may be conducive to opportunistic capital deployment.
The payout here is a 5.15% yield. The Jefferies price target is $108. Blackstone stock has a consensus target of $98.10, while the shares closed on Monday at $94.90.
24/7 Wall St.Bloomin’ Brands
Chances are good you have had a meal at one of this company’s extremely popular restaurants. Bloomin’ Brands Inc. (NASDAQ: BLMN) owns and operates casual, upscale casual and fine dining restaurants in the United States and internationally.
The company’s restaurant portfolio includes Outback Steakhouse, a casual steakhouse restaurant; Carrabba’s Italian Grill, a casual Italian restaurant; Bonefish Grill; and Fleming’s Prime Steakhouse & Wine Bar, a contemporary steakhouse.
As of December 26, 2021, Bloomin’ Brands owned and operated 1,013 full-service restaurants and franchised 157 restaurants across 47 states, as well as 156 full-service restaurants and 172 franchised restaurants across 17 countries and Guam.
Investors receive a 2.37% dividend. Jefferies has set its target price at $36, well above the $27.00 consensus target. Bloomin’ Brands stock closed at $23.65 on Monday.
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Caterpillar
This large cap leader is a solid idea for growth and income investors who are more conservative. Caterpillar Inc. (NYSE: CAT) is the world’s largest manufacturer and marketer of construction equipment, and it is also a leading manufacturer of diesel engines and turbines for transport and industrial applications.
Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three primary segments (Construction Industries, Resource Industries and Energy & Transportation) and also provides financing and related services through its Financial Products segment.
Caterpillar stock comes with a 1.81% dividend. The $295 Jefferies price target is well above the $261.50 consensus target and the most recent close at $242.09.
TE Connectivity
This somewhat lesser-known stock is also another top pick at Jefferies. TE Connectivity Ltd. (NYSE: TEL) manufactures and sells connectivity and sensor solutions to approximately 140 countries in Europe, the Asia-Pacific, the Americas and elsewhere. The company operates through three segments.
The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas and application tooling products for use in the automotive, commercial transportation and sensor markets.
The Industrial Solutions segment offers terminals and connector systems and components. Its products include interventional medical components, relays, heat shrink tubing and wires and cables for industrial equipment, aerospace, defense, marine, medical and energy markets.
The Communications Solutions segment supplies electronic components (such as terminals and connector systems and components), relays, heat shrink tubing and antennas for the data and devices and appliances markets.
Shareholders receive a 1.79% dividend. TE Connectivity stock has a $154 price target at Jefferies. The consensus target is $135.21, and Monday’s closing share price was $125.50.
None of these stocks is likely to make any massive, parabolic moves higher soon. They are safer ideas for nervous investors concerned about the potential for inflation to wreak havoc on the economy for the rest of the year. The January rally has been a pleasant surprise for beleaguered stock market investors, but earnings are dropping, inventories are bloated and inflation, until proven otherwise, is still near the highest in 40 years. So, buying partial positions now with earnings still rolling in makes sense. Nobody ever went broke playing it safe in times of stress.
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