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Wall Street's Top Investment Bank Loves 5 Big Dividend Stocks in 2024

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Every year, the top Wall Street firms release a list of their top stock picks for the coming 12 months, and typically, they are companies that the stock analysts have incredibly high conviction in. In addition, they often have good upside to the assigned price target and are bestowed with either a Buy or Overweight rating depending on the company providing the coverage.

At 24/7 Wall St., we like to cover these top stocks and then screen the companies looking for those paying the highest dividends to investors, as this can increase the total return potential for investors.

We always like to remind our readers about the impact total return has on portfolios because it is one of the best ways to help improve the chances for overall investing success. Again, total return is the combined increase in a stock’s value plus dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.

We screened the 22 top stocks from the Goldman Sachs Directors Cut Conviction List for 2024 and found five companies among the favorite 2024 picks that also pay stellar dividends. 

Ally Financial

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The bank with no buildings posted solid fourth-quarter earnings and pays a hefty 3.34% dividend. Ally Financial, Inc. (NYSE: ALLY) is a digital financial services company that provides various digital financial products and services to consumer, commercial, and corporate customers, primarily in the United States and Canada.

It operates through four segments:

  • Automotive Finance Operations
  • Insurance Operations
  • Mortgage Finance Operations
  • Corporate Finance Operations

The Automotive Finance Operations segment offers:

  • Automotive financing services, including retail installment sales contracts, loans, operating leases, term loans to dealers
  • Financing dealer floor plans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing.

It also provides financing services to companies and municipalities to purchase or lease vehicles and vehicle-remarketing services.

The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel and commercial insurance products directly to dealers.

This segment provides vehicle service and maintenance contracts and guaranteed asset protection products and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory.

The Mortgage Finance Operations segment manages a consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans from third parties and direct-to-consumer mortgage offerings.

The Corporate Finance Operations segment provides:

  • Senior secured leveraged cash flow and asset-based loans to middle-market companies
  • Leveraged loans, and commercial real estate products to serve companies in the healthcare industry

The company also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services.

Blue Owl Capital

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The Goldman Sachs team is optimistic about this asset management company, and the stock pays a solid 3.15% dividend. Blue Owl Capital Inc. (NYSE: OWL) is an asset manager. It offers permanent capital base solutions that enable it to provide a platform for 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
  • GP capital solutions products, which provide capital solutions, including GP minority equity investments
  • GP debt financing, and professional sports minority investments to large private capital managers
  • Real estate products that focus on structuring sale-leaseback transactions, which includes triple net leases

Chevron

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This integrated giant is safer for investors looking to get positioned in the energy sector, pays a rich 4.04% dividend, and Buffett added 16 million shares in the first quarter. Chevron Corporation (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.

The company operates in two segments:

  • Upstream
  • Downstream

The Upstream segment is involved in the following:

  • 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
  • Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

  • Refining crude oil into petroleum product
  • Marketing crude oil, refined products, and lubricants
  • Manufacturing and marketing renewable fuels
  • Transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car
  • Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

Chevron announced last fall that it has entered into a definitive agreement with Hess Corporation (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023.

Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.

Simon Property Group

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This leading company has rallied smartly off the 2023 lows, pays a fat 5.31% dividend, and looks ready to break out. Simon Property Group Inc. (NYSE: SPG) invests in the global real estate markets. It engages in investment, ownership, management, and development of properties.

The company primarily invests in:

  • Regional malls
  • Premium outlets
  • Mills
  • Community/lifestyle centers

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

Southern Company

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This large-cap utility leader pays a solid 3.94% dividend. Southern Company (NYSE: SO), through its subsidiaries, engages in the generation, transmission, and distribution of electricity.

It operates through three segments:

  • Gas Distribution Operations
  • Gas Pipeline Investment
  • Gas Marketing Services

The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations.

Southern Company serves approximately 8.8 million electric and gas utility customers. Further, the company offers digital wireless communications and fiber optics services.

 

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