Identifying stocks to buy and hold for decades rather than months or years can be difficult. The world and the economy are constantly changing, creating risks for long-term investors. A dividend payment from a large, profitable company with a leading market share in a stable or growing industry is about the closest thing to a guarantee a long-term investor can find in the market. In fact, dividends alone have accounted for about 40% of total stock market returns since 1930.
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Here are seven attractively valued dividend stocks investors can bet on for the long term, according to Morgan Stanley analysts:
| Stock | Implied upside from Dec. 29 Close | Forward dividend yield |
| JPMorgan Chase & Co. (ticker: JPM) | 12.3% | 2.5% |
| Home Depot Inc. (HD) | 1.0% | 2.4% |
| Procter & Gamble Co. (PG) | 18.7% | 2.6% |
| AbbVie Inc. (ABBV) | 27.1% | 4.4% |
| Coca-Cola Co. (KO) | 10.3% | 3.1% |
| McDonald’s Corp. (MCD) | 6.2% | 2.3% |
| Wells Fargo & Co. (WFC) | 9.7% | 2.8% |
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is one of the world’s largest banks and financial services companies, with roughly $3.7 trillion in assets. A string of bank failures in early 2023 weighed on the financial sector, but JPMorgan took advantage of the opportunity and acquired First Republic Bank after it failed and was seized by the Federal Deposit Insurance Corp., or FDIC. Analyst Manan Gosalia says JPMorgan has consistently gained deposit market share from competitors, and the First Republic acquisition will fuel additional gains. Morgan Stanley has an “overweight” rating and $191 price target for JPM stock, which closed at $170.10 on Dec. 29.
Sector: Financials Yield: 2.5%
Home Depot Inc. (HD)
Home Depot is one of the largest North American home improvement retailers. Analyst Simeon Gutman says U.S. home improvement demand is still normalizing following a boom during the COVID-19 pandemic, and 2024 revenue growth could be lower than expected for Home Depot. However, Gutman says Home Depot has a track record of strong execution, and any weakness in the stock as consensus earnings estimates drop is a long-term buying opportunity. He says same-store sales growth numbers will likely not get materially worse from current levels. Morgan Stanley has an “overweight” rating and $350 price target for HD stock, which closed at $346.55 on Dec. 29.
Sector: Consumer discretionary Yield: 2.4%
Procter & Gamble Co. (PG)
Procter & Gamble produces household consumer products and owns a number of popular brands, including Pampers, Tide and Gillette. Analyst Dara Mohsenian recently met with Procter & Gamble management and says the company is on track to continue its positive momentum in the U.S. and Europe, while China and emerging markets will likely remain challenging heading into 2024. Mohsenian says the high-end beauty market in China has been particularly weak. However, Procter & Gamble has a strong positioning for the long-term and has consistently proven its ability to execute. Morgan Stanley has an “overweight” rating and $174 price target for PG stock, which closed at $146.54 on Dec. 29.
Sector: Consumer staples Yield: 2.6%
AbbVie Inc. (ABBV)
AbbVie is a global pharmaceutical company. Its key drug is Humira, which treats rheumatoid arthritis, psoriasis, Crohn’s disease and other conditions. Analyst Terence Flynn says AbbVie is successfully diversifying its portfolio so it’s less reliant on Humira, and the successful launches of immunology drugs Skyrizi and Rinvoq have reduced risk for investors. Flynn says AbbVie has an attractive growth profile and has opportunities to de-risk its mid-to-late-stage drug development pipeline, generate mid single-digit earnings and revenue growth, and expand the stock’s earnings multiple over time. Morgan Stanley has an “overweight” rating and $197 price target for ABBV stock, which closed at $154.97 on Dec. 29.
Sector: Health care Yield: 4.4%
[See: Artificial Intelligence Stocks: The 10 Best AI Companies.]
Coca-Cola Co. (KO)
Coca-Cola is a leading non-alcoholic beverage company. Mohsenian says Coca-Cola’s four-year compound annual organic sales growth of 7.7% is a testament to the company’s consistency and ongoing growth opportunities. He says Coca-Cola’s revenue growth will likely outpace peers in the long-term given the company’s steady volume growth and strong pricing leverage. Coca-Cola faces tax risks tied to its dispute with the Internal Revenue Service, but Mohsenian says it may take “many years” for that case to be completely resolved and the dispute shouldn’t spook investors. Morgan Stanley has an “overweight” rating and $65 price target for KO stock, which closed at $58.93 on Dec. 29.
Sector: Consumer staples Yield: 3.1%
McDonald’s Corp. (MCD)
McDonald’s is the world’s largest fast food company. Analyst Brian Harbour says McDonald’s has made consistent market share gains in the past five years and has reported relatively stable earnings. Harbour expects that strong execution will continue in 2024 and beyond, even in a potentially weaker consumer environment. He says McDonald’s unit growth, which will approach 5% annually by 2027, will be key to supporting the stock’s earnings multiple. Harbour says McDonald’s high-quality assets and advertising scale provide structural advantages over many competitors. Morgan Stanley has an “overweight” rating and $315 price target for MCD stock, which closed at $296.51 on Dec. 29.
Sector: Consumer discretionary Yield: 2.3%
Wells Fargo & Co. (WFC)
Wells Fargo is one of the largest U.S. banks, lending mostly within the U.S. market. Gosalia says Wells Fargo’s excess capital position sets it apart from peers and gives the bank one of the best capital return profiles among large-cap U.S. banks. Specifically, Wells Fargo’s Common Equity Tier 1 ratio of 11% is more than 2% above the regulatory minimum, which Gosalia says gives the bank about $26 billion in capital flexibility. He projects Wells Fargo can reach a 61% expense ratio by 2025. Morgan Stanley has an “overweight” rating and $54 price target for WFC stock, which closed at $49.22 on Dec. 29.
Sector: Financials Yield: 2.8%
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Update 01/02/24: This story was previously published at an earlier date and has been updated with new information.
