The rally to start 2023 has been a pleasant surprise for investors who were battered in 2022. However, the strong move to the upside we saw over the past seven weeks looks like it is stalling and it may be time for a move to safer ground. One of the best strategies for investors now may be to move from riskier assets to dividend-paying stocks that can hold their ground should another big move lower be on the way. If Tuesday’s trading was any indication, we could be on our way.
One thing for sure is that with the looming storm clouds on the horizon, and the potential for as many as three more interest rate increases, many strategists on Wall Street feel we will be fortunate to have high single-digit gains for the balance of 2023. We could very well have a 20% or bigger sell-off added as well.
We screened the Goldman Sachs Conviction List of top stock picks, looking for dividend-paying blue chips that worried investors can look at now. The following six top stocks hit our screens, all of which are of course rated Buy. It is important to remember though that no single analyst report should be used as a sole basis for any buying or selling decision.
Blue Owl Capital
Goldman Sachs team is quite positive on this asset management company, as the stock is on the firm’s Conviction List of top stock picks. Blue Owl Capital Inc. (NYSE: OWL) offers permanent capital base solutions that enable it to offer a holistic platform to middle market companies, large alternative asset managers and corporate real estate owners and tenants.
The company provides direct lending products that offer private credit products comprising diversified, technology, first lien and opportunistic lending to middle-market companies. Its GP capital solutions products offer capital solutions, including GP minority equity investments, GP debt financing and professional sports minority investments to large private capital managers. Its real estate products are focused on structuring sale-leaseback transactions, which includes triple net leases.
Blue Owl Capital offers its solutions through permanent capital vehicles, as well as long-dated private funds.
Investors receive a 3.34% dividend. The Goldman Sachs price target on the shares is $16.75, while the consensus target is just $12.38. Tuesday’s closing share price of $12.73 was down close to 6% on the day.
This top value stock in the financial sector is offering a very solid entry point. Citizens Financial Group Inc. (NYSE: CFG) operates approximately 2,700 ATMs and 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions, as well as through online, telephone and mobile banking services, and it maintains approximately 130 retail and commercial non-branch offices.
Citizens Financial operates in two segments. The Consumer Banking segment offers traditional banking products and services, including checking and savings accounts, home and education loans, credit cards, business loans, mortgage and home equity lending and unsecured product finance and personal loans, as well as wealth management and investment services to retail customers and small businesses. This segment also provides indirect auto finance for new and used vehicles through auto dealerships.
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