In a logical world, one would think that, with the Federal Reserve raising interest rates all year long, rates across the entire Treasury yield curve would be headed higher. Yet, just the opposite has occurred. Since the middle of June, the yields on the benchmark 10-year note and 30-year bond have dropped a stunning 23%. In fact, with federal funds now at 2.25% to 2.50%, the 10-year note is only 28 basis points higher.
Why is this happening? The biggest for this is that the bond market senses that a recession, if not here now despite the empirical data that says it is, is certainly on the way, and it could be very ugly. Add in the fact that the “peak inflation” narrative was strengthened by the lower than expected consumer price index numbers this week, once again sent buyers into the Treasury markets, driving rates lower yet again.
So what are income investors to do? Look for quality stocks that can survive in a turbulent market and that pay big dividends. We screened our 24/7 Wall St. research database for quality companies that, while perhaps off the radar, offer solid upside and dependable dividends. Plus, 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.
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. In 2008, it spun off its international cigarette business to shareholders. The stock was pounded recently, as last month the U.S. Food and Drug Administration announced the ban of all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is focused on selling its nicotine products to teenagers. A court has granted Juul’s request for a stay on the ban, allowing the company to still sell the products while an appeal is made on the decision.
While this gets sorted out, it is a good bet that investors will still receive an 8.05% dividend. Deutsche Bank has a $46 target price on Altria stock. The consensus target is higher at $49.54, and shares closed on Wednesday at $44.74.
The need for the electronics and gear to set up a “work from home” office has been a huge tailwind for this leading retailer, and what started as a pandemic necessity has turned into a trend. Best Buy Inc. (NYSE: BBY) is a top specialty retailer of consumer electronics in the United States and Canada. As of January 30, 2022, it had 1,144 stores.
Those stores provide computing products, such as desktops, notebooks and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness, home theater, portable audio comprising headphones and portable speakers, and smart home products.
Its stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers and vacuums; entertainment products consisting of drones, peripherals, movies, music and toys, as well as gaming hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living and sporting goods.
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