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 Feb. 7 close | Forward dividend yield |
| JPMorgan Chase & Co. (ticker: JPM) | 30% | 2.4% |
| Procter & Gamble Co. (PG) | 9.4% | 2.4% |
| Home Depot Inc. (HD) | 3.4% | 2.3% |
| AbbVie Inc. (ABBV) | 12.6% | 3.5% |
| Bank of America Corp. (BAC) | 23.6% | 2.9% |
| Coca-Cola Co. (KO) | 8.4% | 3.1% |
| McDonald’s Corp. (MCD) | 9.6% | 2.3% |
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is one of the world’s largest banks
and financial services companies, with roughly $3.4 trillion in assets under management. A string of bank failures in early 2023 weighed on the financial sector, but JPMorgan took advantage of the opportunity and acquired failed First Republic Bank after it was seized by the Federal Deposit Insurance Corp. Analyst Betsy Graseck says JPMorgan is gaining market share and has a very strong balance sheet, with capital levels well above regulatory minimums. Morgan Stanley has an “overweight” rating and $221 price target for JPM stock, which closed at $175.43 on Feb. 7.
Sector: Financials Yield: 2.4%
Procter & Gamble Co. (PG)
Procter & Gamble produces household consumer products and owns several popular brands, including Pampers, Tide and Gillette. Analyst Dara Mohsenian says Procter’s management is executing well and the company is gaining market share. In addition, Mohsenian says Procter has clear gross margin upside in 2024, and its earnings guidance for the second half of the year is likely overly conservative. He projects Procter & Gamble will maintain annual revenue growth in the mid single-digit percentage range in the long term, leading its industry peer group. Morgan Stanley has an “overweight” rating and $174 price target for PG stock, which closed at $159.12 on Feb. 7.
Sector: Consumer staples Yield: 2.4%
Home Depot Inc. (HD)
Home Depot is one of the largest North American home improvement retailers. Analyst Simeon Gutman says Home Depot still has opportunities for internal improvement if it continues to reinvest in its business. Gutman anticipates the home improvement market will return to growth in 2024 and 2025, and he believes Home Depot will exceed consensus same-store sales growth estimates this year. He projects 2024 same-store sales growth of 1.7% and says Home Depot is positioned to grow earnings at a 7% annual rate through at least 2025. Morgan Stanley has an “overweight” rating and $375 price target for HD stock, which closed at $362.69 on Feb. 7.
Sector: Consumer discretionary Yield: 2.3%
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AbbVie Inc. (ABBV)
AbbVie is a global pharmaceutical company. Its key drug is Humira for treating rheumatoid arthritis, psoriasis, Crohn’s disease and other conditions. Analyst Terence Flynn says AbbVie dominated the global aesthetics market, including an estimated $2.5 billion in Botox sales and $1.4 billion in Juvederm sales in 2023. Flynn says AbbVie is successfully diversifying its business outside of Humira, reducing risk. He says the 2019 acquisition of Allergan and the successful launches of immunology drugs Skyrizi and Rinvoq have been particularly encouraging. Morgan Stanley has an “overweight” rating and $197 price target for ABBV stock, which closed at $175.01 on Feb. 7.
Sector: Health care Yield: 3.5%
Bank of America Corp. (BAC)
Bank of America is one of the largest U.S. commercial and investment banks and wealth management services providers. Graseck says Bank of America has an extremely attractive valuation at current levels and is trading at less than 10 times her 2025 earnings-per-share estimate. She says Bank of America generates impressive return on equity and has high-quality deposits, given 92% of its customer checking accounts are primary accounts and two-thirds of its customers have been with the company for at least 10 years. Morgan Stanley has an “overweight” rating and $41 price target for BAC stock, which closed at $33.18 on Feb. 7.
Sector: Financials Yield: 2.9%
Coca-Cola Co. (KO)
Coca-Cola is a leading beverage company. Mohsenian says Coca-Cola’s revenue growth will outpace peers in 2024 thanks to strong beverage pricing power, expansion in international markets, ongoing market share gains and significant ad spending in recent years. Morgan Stanley projects 6.7% organic sales growth for Coca-Cola this year, above consensus estimates of 5.9% growth. Mohsenian says Coca-Cola has consistently outpaced beverage peers in organic sales growth in the past four years, and PepsiCo’s margin expansion goals suggest a favorable competitive environment. Morgan Stanley has an “overweight” rating and $65 price target for KO stock, which closed at $59.99 on Feb. 7.
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 forecast for 4% unit growth in 2024 and 5% annual unit growth by 2027 will be key to supporting the stock’s earnings multiple. In addition, Harbour says McDonald’s focus on marketing, digital sales, technology and product innovation should continue to drive sales growth and market share gains. He says the company’s management has executed its strategies well, and investors should stick with the stock even in a slowing consumer environment. Morgan Stanley has an “overweight” rating and $315 price target for MCD stock, which closed at $287.33 on Feb. 7.
Sector: Consumer discretionary Yield: 2.3%
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7 Dividend Stocks to Buy and Hold Forever originally appeared on usnews.com
Update 02/08/24: This story was previously published at an earlier date and has been updated with new information.
