It never fails. Just when it seems like the financial world has things in good working order, the Silicon Valley Bank episode emerges, and in a quick 48 hours it is game over. Because the Federal Reserve has backstopped the bank, uninsured depositors likely will get (most) of their money bank eventually, and venture capital companies who are drooling over the bank’s loan book will take on many of the start-ups who need to fund payrolls. But once again, the smartest people in the room failed, and failed miserably.
Morgan Stanley’s Mike Wilson is one of Wall Street’s most bearish equity strategists, and with good reason. He feels that the effects of the fastest Federal Reserve rate tightening since the early 1980s has yet to be truly felt, and when it is, it could be very painful. His advice? Sell any market rallies, until we make new bear market lows. That’s a long way from here.
We screened our 24/7 Wall Street equity research universe looking for safe stocks with big dividends, and also offer investors a place to move capital to until we print those potential bear market lows, lows that could be as far down as 3,200 on the S&P 500, or perhaps even lower. Seven stocks look like great ideas now, and all pay dependable and big dividends. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Altria
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, which some feel is worth more than $10 billion and may be a segment of the company that could be sold. Altria posted outstanding fourth-quarter results and also announced a shareholder-friendly $1 billion stock buyback plan.
Investors receive an 8.04% dividend. Stifel has a $50 target price, while the consensus target is $49.65. Altria stock closed on Tuesday at $46.74.
AT&T
The legacy telecommunications company has been going through a long restructuring, has lowered its dividend and has sold off or merged underperforming assets. AT&T Inc. (NYSE: T) provides telecommunications, media and technology services worldwide.
Its Communications segment offers wireless voice and data communications services and sells handsets, wireless data cards, wireless computing devices with carrying cases and hands-free devices through its own company-owned stores, agents and third-party retail stores.
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