Best Dividends? Here are the Stocks to Buy According to Bank of America

Positive Signal for Dividend Stocks in the US Economy

According to Bank of America, the US economy is sending a favorable signal for dividend stocks.
In March, BoFa’s US Regime Indicator, an economic metric, showed the highest increase since July 2021, after entering a recovery phase in February, as equity analyst Savita Subramanian noted.

When it comes to selecting companies, it is crucial to look for firms that pay dividends higher than the market average, Subramanian highlighted in her analysis.
For these characteristics, it is recommended to focus on the second quintile of the Russell 1000 for dividend yields.
This includes the second batch of companies with dividend yields in the index.
This filter avoids owning companies in distress that could fall into the first quintile, the group with the highest dividend yields, if prices drop before potential dividend cuts.

Highlighted Companies

Bank of America’s list includes Southern Copper Corporation, AES Corporation, Vail Resorts, HP Inc., Campbell Soup, Citigroup, APA Corporation, HF Sinclair, and Sempra.

AES and Sempra are two utilities sector companies with dividend yields of 4% and 3.4%, respectively.
Utility companies are known for their predictable dividends.
While they have lagged behind the market this year, there have been some gains in recent months.
The Utilities Select Sector SPDR (XLU) fund has gained 5% year-to-date and is up 4.9% in the last month.

At the end of February, Sempra’s CEO, Jeffrey Martin, stated that the company had increased its capital plan to $48 billion to finance initiatives such as network modernization.
Sempra’s stocks are down by about 4% this year, while AES has lost nearly 10%.

Several energy sector companies are also on the list, including APA and HF Sinclair.
APA has a dividend yield of 3.1%, while HF Sinclair yields 3.5%.
APA recently announced a $4.5 billion all-stock acquisition of Callon Petroleum.

Citigroup, highlighted by Bank of America, posted revenue surprises in the first quarter of this year, thanks to better-than-expected results in its investment banking and trading divisions.
The stocks have risen by 22% year-to-date.

Conclusion

While these companies present investment opportunities, it is crucial for investors to conduct thorough research and consider their risk tolerance before making any investment decisions.
The information provided is for informational purposes only and should not be considered as investment advice.
Investors should always be aware of the risks involved in the market.

For more insights and analysis on investment options, you can also explore Bank of America’s official website.