Sell Any August Rallies and Move to 7 ‘Strong Buy’ Analyst Favorites With Huge Dividends
Wall Street is giddy again after the S&P 500 burst out of the longest bear market in over 70 years in June and then tacked on another 15% in July. Right on cue, the Wall Street cheering financial media and bullish strategists began pounding the table that a new and very potentially strong bull market is on its way to glory. The truth is that the economy is slowing, the real effects of 550 basis points of rate increases have likely yet to be felt and energy prices are trending higher. While many continue to see a soft landing for the economy, some of the incoming data is turning negative, with U.S. banks reporting tighter credit standards and weakening loan demand.
Even more telling is that all the helicopter money from a decade of historically low rates, massive quantitative easing and pandemic handouts is gone, and consumers are starting to load their purchases up on credit cards that have very high rates if you hold any balance. Top economist David Rosenberg warned earlier this summer that the recent rally was unfounded and the economy is almost guaranteed to crack into recession later this year or early in 2024.
What should investors do now? With the futures suggesting that the Federal Reserve may pause its rate-hike campaign again in September, take profits on any strength and move the winnings to high-yielding money markets, and use the original capital to buy stocks that pay huge and dependable dividends.
Seven top Buy-rated stocks look like incredible ideas now, and investors are wise to remember the Wall Street adage that “Nobody ever went broke taking a profit.” It is also 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, which some feel is worth more than $10 billion and may be a segment of the company that could be sold. Altria posted solid second-quarter results and maintained its profit forecast, and it is continuing a shareholder-friendly $1 billion stock buyback plan.
Shareholders receive an 8.32% dividend. Stifel has a $52 target price on Altria stock, while the consensus target is $44.91. The shares closed on Wednesday at $44.57.
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Energy Transfer
The top master limited partnership is a safe play for investors looking for energy exposure and income. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include complimentary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquid (NGL) and refined product transportation and terminaling assets; NGL fractionation; and various acquisition and marketing assets.
After the purchase of Enable Partners in December of 2021, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in all the major U.S. producing regions and markets across 41 states, further solidifying its leadership position in the midstream sector.
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