It’s getting harder and harder for investors seeking income, and with interest rates going nowhere substantially until 2018 by some accounts, things are not going to get any easier. Most investors are looking for yields that are at least 4% and have some degree of safety as well. While there are always higher yielding stocks, typically the higher the yield, the higher the risk, and with a pricey market, adding risk at these levels is dicey.
We decided to screen the Merrill Lynch research database for stocks with at least a 4.5% yield, that weren’t horribly overbought and crowded, like the utilities and some real estate investment trusts, that were rated Buy at the firm. Four that may not be on growth and income investors radars came up and looked solid.
This is the largest of the rural local exchange carriers and is expected to continue get a large dose of government money to provide continuing internet service in rural areas. CenturyLink Inc. (NYSE: CTL) is a global communications, hosting, cloud and IT services company enabling millions of customers to transform their businesses through innovative technology solutions.
CenturyLink offers network and data systems management, Big Data analytics and IT consulting, and it operates more than 55 data centers in North America, Europe and Asia. The company provides broadband, voice, video, data and managed services over a robust 250,000-route-mile U.S. fiber network and a 300,000-route-mile international transport network.
Top Wall Street analysts have liked like the stock over the past year as the company transforms itself from a telecom to a technology company. While some have worried over CenturyLink maintaining the dividend, most are positive on the comparisons for the second half of the year and sequential revenue stability. An update on the data center sale progress and the potential for stocks buybacks are additional positives.
CenturyLink investors receive a gigantic 7.56% dividend. The Merrill Lynch price target for the stock is $42, and the Wall Street consensus target is $29.23. The stock closed trading on Tuesday at $28.57.
This top global pharmaceutical could offer outstanding total return for investors as solid portfolio holding. GlaxoSmithKline PLC (NYSE: GSK) offers pharmaceutical products in the therapeutic areas, including respiratory, anti-virals, central nervous system, cardiovascular and urogenital, metabolic, anti-bacterials, and emesis, dermatology, rare diseases, immuno-inflammation, vaccines, and HIV. It also provides consumer healthcare products in wellness, oral health, nutrition, and skin health areas.
Last year the company announced that the dividend would stay at its current level through 2017, a solid pledge for those seeking security. Also, the FDA approved the company’s Nucala add-on product for severe asthma with a very broad label. In addition, its ViiV Healthcare unit also reported promising data for its HIV treatments. GlaxoSmithKline plans to submit up to 20 new regulatory filings within the next five years, which confirms a very strong pipeline.
GlaxoSmithKline investors are paid a 5.04% dividend. Merrill Lynch has a $50 price target for the stock. The consensus price objective is posted at $48.67. The shares closed Tuesday at $43.36.