As the stock market hovers near all-time highs, veteran investor Jeremy Grantham has labeled it the most expensive in American history, prompting investors to seek out dividend-paying stocks as a means of generating income during uncertain times. Michael Clarfeld from ClearBridge Investments emphasized the importance of dividends, especially in light of persistent inflation.
However, not all high-dividend stocks are safe; elevated yields can indicate company distress. CNBC Pro identified several stocks within the Vanguard Dividend Appreciation Index Fund ETF that yield 1.5% or more, are favored by analysts, and have seen price declines of at least 5% in the past three months.
Abbott Laboratories, yielding 2.7%, has dropped nearly 10% recently but has a 23% upside to its average price target, with 79% of analysts rating it a buy. CEO Robert Ford highlighted the company's shift towards high-growth sectors like cardiovascular and medical technology. Accenture, with a 5.2% yield, has faced a 35% decline but has a 40% upside potential, with 57% buy ratings from analysts.
CEO Julie Sweet noted the company's long-term growth strategy despite recent challenges. Intercontinental Exchange, yielding 1.7%, has a 58% upside and a 95% buy rating, while Medtronic, yielding 3.6%, has a 19% upside despite an 8% decline. Medtronic's recent FDA filings for new technologies indicate ongoing growth potential.
Overall, these dividend stocks may offer investors a way to generate income while navigating a volatile market