5 income-producing stocks to buy for the second half
Uncertainty in the stock market and in the economy may have investors seeking stability in companies that pay regular dividends. Those equities are often seen as a hedge against volatility due to their their reliable income. Stocks fell early last week on concern over the Israel-Iran conflict, but closed marginally higher in the latest five days after the Federal Reserve opted to keep rates unchanged at its June meeting. There could be more volatility ahead after the U.S. bombed three nuclear sites in Iran over the weekend. But for all the attractions of income-producing stocks, not all dividend payers are created equal. To find stocks that may be poised to outperform in the second half, CNBC Pro screened for those in the ProShares S & P 500 Dividend Aristocrats ETF that are rated buy by at least 51% of the analysts covering the stock, and that have at least 10% upside to the average price target, according to FactSet. They also had to have a dividend yield of 1.5% or more, above the S & P 500 average of 1.29%, and covered by at least 10 analysts. Drugmaker AbbVie has a dividend yield of 3.5%, and 15% upside to analysts' consensus price target. The stock is up about 4% year to date. The $328-billion market cap company said earlier this week that its blood cancer treatment, Venclexta, failed to significantly improve overall survival rates in a recent late-stage trial . However, it also said Wednesday its migraine drug, Qulipta, was found in a late stage trial to be superior to a widely-used generic treatment. In late April, AbbVie reported a first-quarter earnings and revenue beat and raised its full-year earnings-per-share guidance. The North Chicago-based company is also investing at least $10 billion in manufacturing in the United States, including four new plants. While its once blockbuster anti-inflammatory drug Humira has seen declining sales since it lost patent protection in 2023, AbbVie has two new immunology treatments, Skyrizi and Rinvoq. Also on the list is Coca-Cola , which has 14% upside to the average analyst's price target and a 2.9% dividend yield. The soft drink giant also topped quarterly earnings expectations in late April and largely reaffirmed its full-year outlook. It called the effect of higher tariffs "manageable," but expects some short-term choppiness tied to trade conflicts. "I think there's going to be some disruption around a number of categories and industries around us, which will have some effect with the consumers," Coke CEO James Quincey said on the company's conference call, "You can see the consumer sentiment has been impacted, [but] the consumer spending ... still seems robust." Shares have risen nearly 11% so far this year. Lowe's is another company that pays an above-average dividend and is sticking with its full-year forecast in the face of tariffs. Investments in stores, customer service and technology have helped the home-improvement retailer navigate "near-term uncertainty and housing market headwinds," CEO Marvin Ellison said in the company's earnings release in May. The stock has 25% upside to the average analyst price target and a 2.3% dividend yield. It has lost 14 % year to date. — CNBC's Amelia Lucas and Melissa Repko contributed reporting.
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