Almost four months into 2023 and we seemed locked in a trading range that will not break through upside resistance and will not give us the panic shakeout sell-off that would truly end a bear market. Now with first-quarter earnings reports rolling in, we are starting to get a good look at what companies are facing as interest rates and tougher lending standards take hold. Some of the early results have been less than stellar. What makes sense for investors now is moving to dividend-paying value stocks that look better prepared to face the economic challenges coming our way.
Value stocks are typically defined as shares of a company with solid fundamentals that are priced below those of its peers, based on analysis of price-to-earnings ratio, yield and other factors. The BofA Securities Value 10 portfolio is quantitatively generated and is based on the firm’s proprietary model. The universe the analysts use is the S&P 500.
We screened the Value 10 portfolio for the five stocks with the highest dividends. We found five top picks that could be big 2023 winners. While all are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Ameriprise Financial
This company has been steadily growing assets under management and is a smart choice for investors looking to add financials. Ameriprise Financial Inc. (NYSE: AMP) provides various financial products and services to individual and institutional clients in the United States and internationally.
The company’s Advice & Wealth Management segment provides financial planning and advice; brokerage products and services for retail and institutional clients; discretionary and non-discretionary investment advisory accounts; mutual funds; insurance and annuities products; cash management and banking products; and face-amount certificates.
The Asset Management segment offers investment management and advice, and investment products to retail, high net worth and institutional clients through unaffiliated third-party financial institutions and an institutional sales force. This segment’s products also include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance and annuity separate accounts, as well as institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds and property and infrastructure funds.
The Retirement & Protection Solutions segment provides variable annuity products to individual clients, as well as life and disability income insurance products to retail clients.
The company was formerly known as American Express Financial and changed its name in September 2005.
Investors receive a 1.58% dividend. BofA Securities has a $402 price target on Ameriprise Financial stock. The consensus target is $363.73, and the closing share price on Thursday was $315.76.
CF Industries
While somewhat off the radar, this stock probably has the biggest upside potential of the top value picks. CF Industries Holdings Inc. (NYSE: CF) manufactures and sells hydrogen and nitrogen products for energy, fertilizer, emissions abatement and other industrial activities worldwide.
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