Many investors will be more than glad to forget 2022 once it finally ends. Back-to-back dreadful consumer and producer price index reports this week show inflation printing new highs not seen since 1981. While those reports are trailing, and the price of oil has dropped dramatically over the past 90 days, the price of food remains stubbornly high. The “peak inflation” narrative may offer some hope, but the reality is it will take a dramatic drop in prices to turn sentiment around.
The Dow Jones industrial average stocks, while on a much smaller index than the Nasdaq or the S&P 500, have performed better overall. Both the Nasdaq and the S&P 500 are in bear market territory, or down 20% or more from highs printed last November. The Dow Jones industrials are down just shy of 16%.
While this is hardly a banner year, the stocks in this venerable index appear to be holding up better. We screened the Dow stocks looking for the highest-yielding companies and found five that look like great ideas now. All five are rated Buy at major Wall Street firms, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Chevron
This integrated giant is a safer way for investors looking to get positioned in the energy sector, as it has a solid position when it comes to natural gas. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.
The Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas (LNG); transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.
The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It is also involved in cash management and debt financing activities, insurance operations, real estate activities and technology businesses.
Chevron stock comes with a 4.18% dividend. Credit Suisse has a $202 target price on the shares. The consensus target is $179.23, and shares closed on Thursday at $135.94.
Cisco
Investors who are more conservative may want to consider this mega-cap tech leader. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.
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