Likely, 2023 will be known as the year artificial intelligence became a permanent part of the investing lexicon. The excitement AI has generated helped drive the Nasdaq to the best first half in over 40 years, and many across Wall Street feel the tech rally has legs. The problem is that 10 stocks have driven the lion’s share of the gains, not only for the Nasdaq but the S&P 500 as well. So, it may be time to take some profits and reinvest the principal in dividend ideas.
Some good news for investors looking to own the index? In its 52-year history, the Nasdaq has had two down years in a row only twice, and it is a good bet that this year will continue that trend by closing higher. In 1973 and 1974, during the Arab oil embargo, and in 2000 to 2002, when the index fell three years in a row after the dot-com collapse, and adding fuel to the fire were the devastating attacks on 9/11.
Given that historical perspective, investors should feel somewhat better about owning the companies that make up the index. We decided to screen the index looking for the highest-yielding stocks and found that they all have some solid defensive qualities, and they also are offering among the best entry points that each has provided in some time. Of course, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Stocks are listed in order of the highest yield. We avoided the energy stocks in the Nasdaq as they pay variable dividends based on commodity pricing and production.
Walgreens Boots Alliance
This huge drugstore chain operator is a safe retail play for investors looking to add health care now, and it trades at a cheap 7.5 times 2023 earnings expectations. Walgreens Boots Alliance Inc. (NASDAQ: WBA) operates as a pharmacy-led health and beauty retail company. It operates through three segments.
The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides specialty pharmacy services and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States; and six specialty pharmacies.
The Retail Pharmacy International segment sells prescription drugs and health and wellness, beauty, personal care and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as online and an integrated mobile application. This segment operated 4,428 retail stores under the Boots, Benavides and Ahumada in the United Kingdom, Thailand, Norway, the Netherlands, Mexico and elsewhere, and 550 optical practices, including 165 on a franchise basis.
The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home health care supplies and equipment, as well as provides related services to pharmacies and other health care providers.
Investors receive a 6.6% dividend. Cowen has a $41 target price on Walgreens Boots Alliance stock. That compares with the $35.40 consensus target and Monday closing share price of $29.02.
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