Dividend stocks beat the market – Visa is among the most popular games of 2023
With stock market volatility expected to persist for the next several months, investors are looking for income. In fact, dividend stocks have outperformed the broader market. The Vanguard Dividend Appreciation Index Fund ETF has a trailing 12-month total return of -5.7%, including dividends reinvested, compared to the S&P 500 total return of -14.6% over the same period. VIG 1Y Mountain Vanguard Dividend Appreciation Index Fund ETF Stocks Last Year Meanwhile, there could be another year of record dividend yields. In 2022, S&P companies paid a record $564 billion in dividends, a 10% increase from 2021, according to S&P Global. With this in mind, CNBC Pro sought out Vanguard Dividend Appreciation Index Fund ETF stocks that analysts love. The companies are rated “buy” by at least 70% of the analysts covering them. They also have at least 10% upside potential, which is reflected in their consensus price target, so there’s some potential stock appreciation alongside the yield. Both Cabot, a specialty chemicals and performance materials company, and First Merchants, a bank, are the most loved by Wall Street, with all analysts rating the stocks Buy. Cabot, which is yielding 2.1%, has nearly 22% upside versus the median target price. First Merchants, combined with its 3.1% yield, has nearly 18% upside potential from its consensus price target. Of all the names on the list, Broadcom has the highest dividend yield at 3.2%. Combined with that yield, the stock has upside potential of 14% versus the average analyst target price. About 71% of the analysts covering the stock rate it as a Buy. Even a recent Bloomberg report that Apple will replace Broadcom’s chip with its own chip by 2025 doesn’t seem to have shaken analysts’ confidence. Bank of America’s Vivek Arya wrote in a note earlier this week that the news for the stock is mildly negative. Instead, Broadcom’s profitability and growth depend more heavily on its unique data center/enterprise network assets and highly resilient infrastructure software assets, he said. Xbox and Windows software maker Microsoft also made it, with a return of 1.2% and up 21% from the average analyst target price. About 75% of analysts who follow Microsoft recommend buying it. Citigroup is one of the companies liking the stock, calling it a top pick for 2023. “While challenges for names that will grow at any cost will prevail, we believe companies that demonstrate good sales efficiency with great market opportunity” , are among the best-positioned companies, analyst Tyler Radke wrote in a note Thursday. Nearly 74% of analysts covering NextEra Energy have a buy rating for the Florida-based utility, which has a 2% dividend yield and 14% upside potential based on analysts’ average price target. In his 2023 utility outlook, Mizuho said his buy rating reflects NextEra’s premium utility business in Florida, as well as its unregulated renewable energy business. “We believe the combination of NEE’s growth prospects and renewable opportunities justifies its group-leading valuation and will continue to drive NEE’s outperformance of the group,” the company said. Finally, payments company Visa has a 0.8% dividend yield and 12% upside potential based on the consensus price target. Around 70% of the analysts covering the stock rate it as a Buy. Visa was recently upgraded from sector weighting to overweight by Keybanc. The Wall Street company said Visa and Mastercard would benefit as fintech grows into an embedded model used by businesses, consumers, merchants and issuers. – CNBC’s Michael Bloom contributed to the coverage.
https://www.cnbc.com/2023/01/13/wall-streets-favorite-income-plays-for-2023.html Dividend stocks beat the market – Visa is among the most popular games of 2023
