Bank of America: 20 stocks with secure dividends that can help you sleep better at night
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- The stock market is limping into the end of the year, and investors are hard pressed to find safety.
- Bank of America found stocks with sustainable dividends to take advantage of a shift in markets.
- These 20 stocks with dividend yields of over 4% can help give investors peace of mind.
It’s a difficult time to be an investor right now.
The world appears to be shifting beneath our feet on a daily basis. Exuberance over a mediocre jobs report last week gave investors hope that the Fed would be able to stop raising interest rates, only for Jerome Powell to dash those hopes in his IMF speech earlier this week.
Longer-term changes are occurring in addition to daily market movements. “The economy has endured a global pandemic and has since seen the fastest spike in rates, two wars break out, inflation triple and then halve, soaring fiscal deficits, rampant labor strikes – until AI takes all of our jobs, that is,” wrote Savita Subramanian, Bank of America’s head of US equity and quantitative strategy, in a recent note to clients.
However, a significant shift in the stock market can also present opportunities. For example, while high-growth technology has led the way this year due to AI excitement, a slower and more steady style of investing may be on the rise.
“We believe that we are now in a total return world in which the contribution of dividends to total market returns could be significantly higher than it was in the last decade, a period marked by falling cash yields and lofty price returns,” Subramanian said in a statement. “We advise investors to seek out companies with above-market and secure (not stretched) dividend yields.”
To that end, Subramanian and her team combed the Russell 1000 for stocks with not just high but also sustainable dividend yields.
To do so, they classified dividend-paying stocks into five quintiles, from highest to lowest dividend yields. They concentrated on the second-highest quintile, arguing that stocks can occasionally shift into the highest quintile not because dividends are intentionally rising, but because the underlying shares are distressed, and as the stock price falls, the company’s dividend yield rises. Subramanian also noted that the inverse is possible: stocks in the second quintile can fall into the third quintile if their prices rise faster than their dividends.
The 20 stocks listed below have the highest dividend yields of the stocks studied by Bank of America, with yields of more than 4%. Each stock is listed with its ticker, last closing price, sector, and dividend yield.
1. Northern Trust Corporation
Ticker: NTRS
Last Closing Price: $69.40
Sector: Financials
Dividend Yield: 4.32%
Source: Bank of America
2. Souther Copper Corporation
Ticker: SCCO
Last Closing Price: $69.82
Sector: Materials
Dividend Yield: 4.32%
Source: Bank of America
3. AES Corporation
Ticker: AES
Last Closing Price: $15.63
Sector: Utilities
Dividend Yield: 4.31%
Source: Bank of America
4. Ventas
Ticker: VTR
Last Closing Price: $42.08
Sector: Real Estate
Dividend Yield: 4.27%
Source: Bank of America
5. Essex Property Trust
Ticker: ESS
Last Closing Price: $207.76
Sector: Real Estate
Dividend Yield: 4.25%
Source: Bank of America
6. STAG Industrial
Ticker: STAG
Last Closing Price: $34.34
Sector: Real Estate
Dividend Yield: 4.25%
Source: Bank of America
7. Mid-America Apartment Communities
Ticker: MAA
Last Closing Price: $119.80
Sector: Real Estate
Dividend Yield: 4.24%
Source: Bank of America
8. Southern Company
Ticker: SO
Last Closing Price: $67.99
Sector: Utilities
Dividend Yield: 4.23%
Source: Bank of America
9. Hasbro
Ticker: HAS
Last Closing Price: $43.26
Sector: Consumer Discretionary
Dividend Yield: 4.23%
Source: Bank of America
10. Interpublic Group of Companies, Inc.
Ticker: IPG
Last Closing Price: $28.63
Sector: Communication Services
Dividend Yield: 4.19%
Source: Bank of America
11. Tapestry
Ticker: TPR
Last Closing Price: $28.27
Sector: Consumer Discretionary
Dividend Yield: 4.17%
Source: Bank of America
12. CNA Financial Corporation
Ticker: CNA
Last Closing Price: $39.47
Sector: Financials
Dividend Yield: 4.17%
Source: Bank of America
13. Iron Mountain
Ticker: IRM
Last Closing Price: $58.88
Sector: Real Estate
Dividend Yield: 4.16%
Source: Bank of America
14. Camden Property Trust
Ticker: CPT
Last Closing Price: $87.16
Sector: Real Estate
Dividend Yield: 4.10%
Source: Bank of America
15. Eastman Chemical Company
Ticker: EMN
Last Closing Price: $76.21
Sector: Materials
Dividend Yield: 4.08%
Source: Bank of America
16. HP
Ticker: HPQ
Last Closing Price: $27.02
Sector: Tech
Dividend Yield: 4.04%
Source: Bank of America
17. Digital Realty Trust
Ticker: DLR
Last Closing Price: $127.61
Sector: Real Estate
Dividend Yield: 4.03%
Source: Bank of America
18. United Parcel Service
Ticker: UPS
Last Closing Price: $139.98
Sector: Industrials
Dividend Yield: 4.03%
Source: Bank of America
19. Flowers Foods
Ticker: FLO
Last Closing Price: $22.16
Sector: Consumer Staples
Dividend Yield: 4.01%
Source: Bank of America
20. Rayonier
Ticker: RYN
Last Closing Price: $28.21
Sector: Real Estate
Dividend Yield: 4.01%
Source: Bank of America
