So far, 2023 has been a welcome relief to the relentless selling we went through last year. Yet, as we have noted this week, almost all the gains generated for the S&P 500 and the Nasdaq are from a few mega-cap tech stocks. The tech-heavy Nasdaq is still up a strong 14.33%, while the old-school Dow Jones industrial average is flat year to date. That disparity should be tantalizing for concerned investors.
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With more banks failing, and interest rates still rising (the Federal Reserve lifted the federal funds rate on Wednesday to 5.00% to 5.25%, the highest level in 17 years), many investors are getting nervous, and rightfully so. With the bank issues and the debt limit ceiling about to be reached by June, it is time to take profits on the mega-cap winners and move to safer old-school stocks that can survive a downturn in the economy.
We screened the venerable Dow Jones industrials looking for the best values and companies that paid dependable dividends. The following five top stocks hit our screen, and 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.
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:
- Enbrel to treat plaque psoriasis, rheumatoid arthritis and psoriatic arthritis
- Neulasta reduces the chance of infection due to 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 3.61% dividend. Goldman Sachs has a $290 target price on Amgen stock. The consensus target is just $256.57, and the stock closed on Thursday at $231.89.
24/7 Wall St.Chevron
This integrated giant is a safer way for investors looking to get positioned in the energy sector, and the shares have backed up nicely. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide. The company operates in two segments.
Chevron’s Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas. It also operates a gas-to-liquids plant.
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The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It is also involved in the cash management and debt financing activities; insurance operations, real estate activities and technology businesses.
Chevron posted stellar first-quarter results and remains one of the best ways to play energy safely.
The company sports a 3.77% dividend. Raymond James has its target price set at $208. Chevron stock has a consensus target of $191.96, and Thursday’s close was at $156.22.
Home Depot
This remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.
Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself, do-it-for-me and professional customers.
Shares of Home Depot make sense for investors looking for a retail idea that stays in favor all year long. The home improvement giant is a solid addition to growth and income portfolios.
Investors receive a 2.81% dividend. Cowen’s $360 price target is well above the $325.88 consensus target. Home Depot stock closed on Thursday at $285.75.
24/7 Wall St.Verizon
This top telecommunications stock offers tremendous value at current levels. Verizon Communications Inc. (NYSE: VZ) provides communications, technology, information and entertainment products and services to consumers, businesses and governmental entities worldwide.
The Verizon Consumer Group provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements, and it offers fixed wireless access (FWA) broadband through its wireless networks. It also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as the District of Columbia, through its fiber-optic network, Verizon Fios product portfolio and a copper-based network.
The Verizon Business Group provides wireless and wireline communications services and products, including data, video, conferencing, corporate networking, security and managed network, local and long-distance voice, network access, and various IoT services and products, as well as FWA broadband through its wireless networks.
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Verizon Communications stock comes with a 6.87% dividend. The $49 Cowen target price compares with a consensus target of $43.79 and Thursday’s $37.35 closing share price.
Walgreens
This huge drugstore chain operator is a safe retail play for investors looking to add health care now, and it trades at a cheap 7.5 times 2023 earnings expectations. 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.
The dividend yield here is 5.73%. Walgreens Boots Alliance stock has a $46 target price at Deutsche Bank. The consensus target is $40.57. The shares ended Thursday trading at $31.55.
Five of Wall Street’s top companies from the venerable Dow Jones industrial average are offering good entry points and paying dependable dividends. While we may have more market downside this summer, these companies have survived market and economic downturns in the past and likely will again.
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