Value Crushes Growth to Start 2023: 7 Defensive ‘Strong Buy’ Stocks With Big Dividends

For years, it seems analysts and portfolio managers have anticipated the return of value stocks as the market has moved higher, and for years they have continued to underperform growth stocks. However, that appears to be changing in 2023, as almost every metric, from valuations to earnings for the growth arena, has started to roll over.






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Value stocks are typically defined as those of a company with solid fundamentals that are priced below shares of its peers, based on analysis of price-to-earnings ratio, yield and other factors. The group bolted out of the gate in 2023 as all the major indexes were up over 3% to start the year, but Wednesday put a dent in those gains. But value stocks are still outpacing growth by a strong 3%.

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We screened our 24/7 equity research database looking for true value stocks that are rated Buy by top Wall Street firms and that come with healthy and dependable dividends. Seven of them hit our screens, but remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Ameriprise Financial

This company has been steadily growing assets under management and is a smart choice for investors looking to add financials. Ameriprise Financial Inc. (NYSE: AMP) provides various financial products and services to individual and institutional clients in the United States and internationally.

The company’s Advice & Wealth Management segment provides financial planning and advice; brokerage products and services for retail and institutional clients; discretionary and non-discretionary investment advisory accounts; mutual funds; insurance and annuities products; cash management and banking products; and face-amount certificates.

The Asset Management segment offers investment management and advice, and investment products to retail, high net worth and institutional clients through unaffiliated third-party financial institutions and an institutional sales force. This segment’s products also include U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds, variable product funds underlying insurance and annuity separate accounts, as well as institutional asset management products, such as traditional asset classes, separately managed accounts, individually managed accounts, collateralized loan obligations, hedge funds, collective funds and property and infrastructure funds.

The Retirement & Protection Solutions segment provides variable annuity products to individual clients, as well as life and disability income insurance products to retail clients.

Shareholders receive a 1.51% dividend. Jefferies has a $390 price target on Ameriprise Financial stock. The consensus target is $347.90. Wednesday’s $328.20 closing share price was down over 2% for the day.

APA

This company was long considered an industry leader when it was known as Apache, and the stock is perhaps offering one of the best entry points in the sector. APA Corp. (NYSE: APA) explores for and produces oil and gas properties. It has operations in the United States, Egypt and the United Kingdom, as well as has exploration activities offshore Suriname. It also operates gathering, processing and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines.

APA is one of the largest U.S. exploration and production companies, with 2.3 billion barrels of oil equivalent of proven reserves (63% liquids). It is an explorer, acquirer and exploiter, and a fiscally conservative company that has grown its reserves and production consistently via acquisitions and organic projects.

APA reported third-quarter net income of $422 million, after reporting a loss in the same period a year earlier. The company said it had profit of $1.28 per share, and adjusted earnings topped Wall Street expectations.

APA stock investors receive a 2.22% dividend, and it will go ex-dividend on Friday. The BofA Securities price target of $62 is well above the $55.23 consensus target and Wednesday’s close at $44.06.

Exelon

This top utility stock makes good sense now for conservative investors. Exelon Corp. (NYSE: EXC) engages in the energy generation, delivery, and marketing businesses in the United States and Canada. It owns nuclear, fossil, wind, hydroelectric, biomass and solar generating facilities.

The company also sells electricity to wholesale and retail customers, and it sells natural gas, renewable energy and other energy-related products and services. Furthermore, it is involved in the purchase and regulated retail sale of electricity and natural gas, as well as the transmission and distribution of electricity and distribution of natural gas to retail customers.

The company also offers support services, including legal, human resources, information technology, financial, supply management, accounting, engineering, customer operations, distribution and transmission planning, asset management, system operations and power procurement services. It serves distribution utilities, municipalities, cooperatives and financial institutions, as well as commercial, industrial, governmental and residential customers.

The dividend yield here is 3.13% dividend. The Morgan Stanley target price is $49, and the consensus target for Exelon stock is $45.20. On Wednesday, the closing share price was $42.23.

Intel

This legacy leader in semiconductors has been hammered, and while some feel it is a value trap, it is hard to count out the company that defined the semiconductor revolution. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.

The platforms are used in various computing applications, comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Intel announced almost a year ago that it would invest significantly to build potentially the world’s largest chip-making complex in Ohio, looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to automobiles. Intel says the 1,000-acre “mega-site” northeast of Columbus has room for as many as eight plants, known as “fabs.” The company estimates it would require a $100-billion investment to fully build and equip those plants.

Investors receive a 4.93% dividend. Needham has set a $32 price target, while the consensus target is $29.96. Intel stock closed on Wednesday at $28.81.

Morgan Stanley

This is one of Wall Street’s white-glove firms, and it may be among the best buys among the banking and investment stocks. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in investment banking (M&A and equity underwriting), equity trading and wealth management, which contributes nearly 50% of firmwide revenues. The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

In 2020, the Wall Street investment bank completed a $13 billion purchase of discount brokerage E-Trade. With 5.2 million customers, E-Trade was once a revolutionary platform that “helped usher in a dramatic shift among financial services firms” and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors.

The company posted outstanding fourth-quarter results on Tuesday, beating earnings expectations solidly, while some big competitors missed badly.

Morgan Stanley stock comes with a 3.10% dividend. The $125 price target at Barclays is a Wall Street high. The consensus target is just $96.15, lower than Wednesday’s close at $96.58.

Pfizer

This top pharmaceutical stock was one of the biggest winners in the COVID-19 vaccine sweepstakes. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes and sells biopharmaceutical products worldwide.

The company offers medicines and vaccines in various therapeutic areas, including the following:

Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands Biologics, small molecules, immunotherapies and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena and Braftovi brands Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga and Paxlovid brands. Pneumococcal disease, meningococcal disease, tick-borne encephalitis and COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba and the Prevnar family brands Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis and Cibinqo brands Amyloidosis, hemophilia and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX and Genotropin brands

Shareholders receive a 3.56% dividend. Pfizer stock has a $60 price objective Goldman Sachs, and the consensus price target is set at $55.30. The shares ended Wednesday over 2% lower to $45.00.

Walgreens

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.

The company pays a 5.17% dividend. The Cowen target price is $54. The consensus target is just $41.62. Walgreens Boots Alliance stock ended Wednesday at $35.61, down almost 2% on the day.

These seven top companies have shares that are cheap on price-to-earnings metrics, and they all pay dependable dividends. While they may not have any parabolic moves higher coming anytime soon, they all offer slow and steady growth and the ability to weather economic storms, which we are very likely to wind up in later this year as a recession appears to be on the horizon.

Originally published at 24/7 Wall St.

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