These dividend-paying stocks are havens for income investors.
The stock market in 2020 was a roller coaster. In addition to the unpredictable swings in stock prices, the Federal Reserve’s emergency interest rate cuts plunged bond yields, leaving income investors with few viable options. Many companies have also cut or suspended dividends to support their balance sheets during the economic recession. Reliable high-yield dividend stocks are difficult to find for investors looking to defend themselves in an uncertain environment; it has become difficult to find reliable, high-yielding dividend stocks. Here are seven Bank of America recommended stocks that have a return of at least 4% yields and at least A quality ratings from S&P Global.
PNC Financial Services Group (ticker: PNC)
PNC Financial Services is the seventh-largest deposit-based bank in the United States. Analyst Erika Najarian says PNC is well-positioned for both defense and offense, given a $5.9 billion allowance for loan and rental losses on its balance sheet. Low-interest rates are putting pressure on banks’ net interest margins, but Najarian says PNC’s gains are safe. PNC also pays a 4.1% dividend, which is more than double the average yield of the S&P 500. Bank of America has a ‘buy’ rating and a target price of PNC shares of $ 122.
Royal Bank of Canada (RY)
The Royal Bank of Canada is the largest Canadian bank in terms of market capitalization. In the most recent quarter, the bank’s credit losses decreased to 76% quarter-over-quarter. Royal Bank is not out of the woods yet, analyst Ebrahim Poonawala says, but its return and its 12% common equity Tier 1 capital ratio of common equity suggest that this is healthier than many of his peers. Poonawala is optimistic that Royal Bank can gain market share during the economic downturn. The share pays a dividend of 4.5%. Bank of America has a “buy” rating and a target price of $ 87 for RY stock.
Telus Corp. (TU)
Telus is one of the largest telecommunications companies in Canada. Excluding one-off costs, earnings before interest, taxes, depreciation, and amortization rose 5% in the second quarter increased 5%, the company said. Analyst David Barden is optimistic about Telus due to its continued growth in subscribers, its diversified service offerings, its ability to bundle services, its leading customer service, and seamless networks. Top-quality wire and wire. He predicts that 5G network coverage will reach 30% of the Canadian population by the end of the year. Telus shares pay a dividend of 4.8%. Bank of America has a ‘buy’ rating and a target price of TU shares of $ 21.50.
ECB
ECB is Canada’s largest telecommunications company and Telus’s biggest competitor. Barden says the second quarter has been the “weak watermark” of the current recession, and the headwinds for the company are expected to ease in the second half of the year. Despite the challenging environment, ECB recorded 35,000 new net prepaid and postpaid subscribers in the second quarter, and Barden says the fee income should help make up for lost roaming revenues. ECB shares pay a 5.9% dividend, and Barden says the company’s cash flow should support annual dividend growth of 5%. Bank of America has a ‘buy’ rating and a target price of BCE shares of $ 54.
BCE (BCE)
BCE is Canada’s largest telecommunications company and Telus’ biggest competitor. Barden says the second quarter has been the “weak watermark” of the current recession, and the headwinds for the company are expected to ease in the second half of the year. Despite the challenging environment, ECB recorded 35,000 new net prepaid and postpaid subscribers in the second quarter, and Barden says the fee income should help make up for lost roaming revenues. BCE shares pay a 5.9% dividend, and Barden says the company’s cash flow should support annual dividend growth of 5%. Bank of America has a “buy” rating and a target price of $ 54 for BCE shares.
Enterprise Products Partners (EPD)
Enterprise Products Partners is one of the largest principal public limited partnerships and offers a range of intermediate energy services, including the collection, processing, and storage of natural gas and natural gas liquids. The energy sector was hit hard in 2020 due to travel restrictions, but analyst Ujjwal Pradhan says Enterprise’s second-quarter earnings are a clear demonstration of the company’s best operations. Recent data from the refining industry suggests operating speeds have recovered to about 80% of pre-crisis levels. Corporate stocks also have a return of 10.8%. Bank of America has a ‘buy’ rating and a price target of $ 24 for EPD stock.
Fifth Third Bancorp (FITB)
Fifth Third Bancorp is one of the largest regional banks in the US. Najarian says Fifth Third is likely to carry a high cash balance until the end of 2020, which will put pressure on margins. However, management has indicated that the net interest income should return to 3% if liquidities normalize after the economic downturn. Meanwhile, Najarian says investors should not undergo downward revisions to earnings guidelines, as the company has simply reduced risk by building up cash reserves. Finally, the shares of Fifth Third pay an attractive 5% dividend. Bank of America has a ‘buy’ rating and a price target of $ 26 for FITB stock.
