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 over the past 90 years.
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Here are seven attractively valued dividend stocks investors can bet on for the long term, according to Argus analysts:
| Stock | Forward yield as of June 12 | Implied Upside as of June 12 |
| JPMorgan Chase & Co. (ticker: JPM) | 2.3% | 10.6% |
| Procter & Gamble Co. (PG) | 2.4% | 10.5% |
| Johnson & Johnson (JNJ) | 3.4% | 22.6% |
| Home Depot Inc. (HD) | 2.7% | 19.1% |
| Merck & Co. Inc. (MRK) | 2.3% | 6.2% |
| Chevron Corp. (CVX) | 4.2% | 34.8% |
| Cisco Systems Inc. (CSCO) | 3.5% | 52.9% |
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is one of the world’s largest banks and financial services companies with roughly $4.1 trillion in assets as of the first quarter. JPMorgan took advantage of the 2023 U.S. regional banking crisis and acquired failed First Republic Bank after it was seized by the Federal Deposit Insurance Corporation, or FDIC. Analyst Stephen Biggar says JPMorgan has been reporting impressive net interest income growth, which has been boosted by the First Republic acquisition. Biggar says the First Republic assets included healthy loans and deposits from high-net-worth customers. Argus has a “buy” rating and $215 price target for JPM stock, which closed at $194.36 on June 11.
Sector: Financials Forward yield: 2.3%
Procter & Gamble Co. (PG)
Procter & Gamble produces household consumer products and owns several popular brands, including Pampers, Tide and Gillette. Analyst Taylor Conrad says better productivity, product innovation and improving advertising will help Procter & Gamble grow its earnings and increase its share price in the long term. He says Dawn Powerwash and other innovative products are gaining market share from leading competitors and are allowing Procter to raise prices to offset rising costs due to inflation. Procter’s less-expensive brands are even benefiting from customers trading down from premium brands. Argus has a “buy” rating and $185 price target for PG stock, which closed at $167.48 on June 11.
Sector: Consumer staples Forward yield: 2.4%
Johnson & Johnson (JNJ)
Johnson & Johnson is a global leader in the pharmaceutical, medical device and consumer health care products industries. Analyst David Toung says Johnson & Johnson has a strong pharmaceutical product pipeline, many growth opportunities and an impressive track record of identifying and integrating acquisitions. He says the company’s pharma and medical technology segments have particularly attractive outlooks given the large slate of new drugs and products set for launch. Following the spin-off of Johnson & Johnson’s consumer health business, the company now has more capital for acquisitions and research and development. Argus has a “buy” rating and $180 price target for JNJ stock, which closed at $146.76 on June 11.
Sector: Health care Forward yield: 3.4%
Home Depot Inc. (HD)
Home Depot is one of the largest North American home improvement retailers. Analyst Christopher Graja says falling interest rates could be a bullish catalyst for Home Depot because many Americans are waiting for lower rates before they start kitchen or bathroom remodeling projects. Graja estimates 75% of U.S. homeowners are locked in with mortgage rates below 4.5%, and many of those homeowners will likely opt to remodel existing homes rather than move to a new home at a potentially much higher mortgage rate. Argus has a “buy” rating and $400 price target for HD stock, which closed at $335.72 on June 11.
Sector: Consumer discretionary Forward yield: 2.7%
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies, and its leading products include cancer drug Keytruda and HPV vaccine Guardasil. Analyst Jasper Hellweg says Merck’s portfolio of hospital care, oncology and antiviral products generate impressive cash flows, and the company is constantly obtaining new regulatory approvals for additional indications for Keytruda and its other leading drugs. Hellwig says Keytruda, which comprised about 44% of Merck’s revenue in Q1, is the company’s cash cow. Merck has also been acquiring biotech companies developing potentially value-creating drugs, such as Harpoon Therapeutics. Argus has a “buy” rating and $140 price target for MRK stock, which closed at $131.84 on June 11.
Sector: Health care Forward yield: 2.3%
Chevron Corp. (CVX)
Chevron is a global oil major that operates exploration and production, refining, marketing and petrochemical businesses. Analyst Bill Selesky says Chevron has an impressive track record of dividend payments and share buybacks. The company’s top-tier management team has repeatedly navigated the difficult ups and downs of the oil and gas markets while maintaining capital returns and making strategic acquisitions. Selesky says Chevron is poised to grow production via project startups and acquisitions, and shareholders can expect the company to continue returning excess cash to investors. Argus has a “buy” rating and $211 price target for CVX stock, which closed at $156.49 on June 11.
Sector: Energy Forward yield: 4.2%
Cisco Systems Inc. (CSCO)
Cisco Systems provides networking, cloud, and cybersecurity hardware and software solutions. Analyst Jim Kelleher says Cisco’s customers have been taking a conservative approach to ordering products thanks to elevated interest rates and macroeconomic uncertainty. As a result, product sales have softened. However, Kelleher says Cisco’s planned global 5% workforce reduction will trim costs. Meanwhile, the company’s software revenue, annualized recurring revenue and remaining performance obligations have been relatively solid. He says Cisco investors will need to be patient for a rebound in product sales, which might not happen until fiscal 2025. Argus has a “buy” rating and $70 price target for CSCO stock, which closed at $45.77 on June 11.
Sector: Technology Forward yield: 3.5%
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7 Dividend Stocks to Buy and Hold Forever originally appeared on usnews.com
Update 06/12/24: This story was previously published at an earlier date and has been updated with new information.
