We have talked about it for months, and it has finally arrived, the kind of bear market that was inevitable after years of easy money and Federal Reserve supported liquidity. Last week, interest rates were increased by 50 basis points to make the new range for federal funds 0.75% to 1.00%. Fed Chair Powell already has telegraphed increases for June and July of additional 50 basis points, with the stated goal of getting the funds rate to 3.25% by the end of 2023.
The stock market was hammered last week, with the Nasdaq down 5% on Thursday and an additional 1.4% on Friday, as the tech-heavy index responds to the increases in rates. Down a stunning 22.37%, that is its worst start to a year on record. The Dow Jones industrials are only down 9.46%, but that is only 30 stocks, while the S&P 500 has logged a 13.49% loss this year.
Worried investors are dreading the second-quarter statements, and with good reason, as the path of least resistance is probably lower. As the adage goes, “Don’t fight the Fed.” That works both ways. We screened our 24/7 Wall St. research database looking for solid, defensive blue-chip companies that pay dependable dividends and have stocks that should be able to withstand further selling.
Seven top companies hit our screens. All make sense for investors looking to shift portfolios or others with cash at the ready. While these stocks are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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.
AT&T also provides data, voice, security, cloud solutions, outsourcing and managed and professional services, as well as customer premises equipment for multinational corporations, small and midsized businesses, and governmental and wholesale customers. In addition, it offers broadband fiber and legacy telephony voice communication services to residential customers.
The company markets its communications services and products under the AT&T, Cricket, AT&T Prepaid and AT&T Fiber brand names. The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brand names.
AT&T stock investors receive a 5.54% dividend. Raymond James has a $26 price objective, and the consensus target is $24.64. The stock traded at $19.80 early Monday.
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