The market began the week just as it ended the last one, with interest rates rising and tech shares selling off.

Indeed, rates rose for a seventh straight day to hit levels not seen in some time. The yield on the 10-year Treasury note spiked 5.7 basis points Monday (a basis point is one-one hundredth of a percentage point) to a three-year high of 2.77%.

Predictably, the technology sector was one of the worst-performing sectors, sinking 2.5%.

But it was the energy sector (-3.0%) that led the market lower, hurt by a drop in oil prices. U.S. crude oil futures shed 4% to settle at $94.29 per barrel amid fear that extended COVID-19-related shutdowns in China will sap global energy demand.

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The Nasdaq Composite ended the day down 2.2% at 13,411, hurt by weakness in big-cap tech stocks like Microsoft (MSFT, -3.9%) and Nvidia (NVDA, -5.2%). The broader S&P 500 Index (-1.7% at 4,412) and blue-chip Dow Jones Industrial Average (-1.2% at 34,308) likewise finished the session in the red.

As a reminder, it's a short week for traders and investors. The stock market will be closed on April 15 for Good Friday.

Other news in the stock market today:

• The small-cap Russell 2000 gave back 0.7% to 1,980.
• Gold futures gained 0.1% to settle at $1,948.20 an ounce.
• Bitcoin plunged 6.4% to $40,034.52. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Twitter (TWTR) stock was down more than 3% at its session low following news that Tesla (TSLA) CEO – and new TWTR stakeholder – Elon Musk would not be joining the social media firm's board of directors, as reported late last week. "Musk's decision to not join the board of Twitter is the culmination of a week of bizarre behavior and is simply a distraction from the many operational woes facing Tesla," says David Trainer, CEO of investment research firm New Constructs. "The Musk bump in Twitter shares is likely to fade as investors realize the only value Musk brought was publicity - not all of it good. Although Twitter remains a popular platform, it has its own problems and suggestions like removing a letter from its name can do more harm than good." TWTR was able to shake off its earlier weakness and end the day up 1.7%.
• AT&T (T) jumped 7.7% after the telecommunications firm's WarnerMedia unit on Friday officially completed its merger with Discovery. (The combined company – Warner Bros Discovery – began trading on the Nasdaq today under the symbol "WBD.") Additionally, J.P. Morgan analyst Philip Cusick resumed coverate on T with an Overweight (Buy) rating. "The company is investing in its wireless network with its 5G build out as well as expanding its fiber footprint to 30 million locations by 2025," Cusick writes in a note. "The network enhancements support wireless subscriber and service revenue growth in Mobility and broadband services in Consumer and Business Wireline."

Earnings Season is About to Begin

Although interest rates have been the market's main driver for months, earnings season will likely steal away traders' attention soon enough. Corporate results start flowing this week, and they're not projected to be as robust as we've come to expect.

"Analysts and companies have been more pessimistic compared to recent quarters in their earnings estimate revisions and earnings outlooks for the first quarter to date," says John Butters, senior earnings analyst at FactSet.

The current estimated earnings growth rate for the S&P 500 is 4.5%, which would mark the lowest earnings growth rate since Q4 2020, Butters says. However, considering that the majority of S&P 500 companies report earnings above estimates, the analyst expects the actual growth rate to top 10% for a fifth consecutive quarter.

JPMorgan Chase (JPM) headlines this week's earnings calendar when it unveils first-quarter results before Wednesday's opening bell, marking a stretch of reporting from a number of Dow Jones stocks and financial firms. Speaking of the latter, high inflation and rising interest rates put financial earnings in particulary sharp focus. Here, we've compiled a list of some of the most compelling plays in the sector, according to Wall Street's pros.

The first day of February trading was a relative yawner as the three major indexes finished Tuesday with modest gains. But given that investors just suffered the worst month for stocks since the COVID bear market, they were likely grateful for a quiet, positive session.

If not, they received something a little more exciting in the form of an Alphabet (GOOGL, +1.7%) stock split.

Earlier Tuesday, the Institute for Supply Management announced that its January manufacturing index declined by 1.1 points to 57.6. (Readings over 50.0 indicate expansion.) That was in line with expectations and showed continuing growth in the manufacturing sector, albeit at a slower pace than in December.

"The composition of the report was soft, with a small increase in the employment component, but larger declines in the production and new orders components," says Goldman Sachs Economics Research.

The earnings calendar had a few events of note, too.

United Parcel Service (UPS, +14.1%) popped to an all-time high after easily topping the Street's quarterly earnings and revenue forecasts. The better-than-expected results reflected the ongoing surge in online shopping and CEO Carol Tome's efforts to increase profitability.

Meanwhile, Exxon Mobil (XOM, +6.4%) stock hit a level last seen in 2019. The energy major eclipsed fourth-quarter profit and sales expectations and said it would resume stock buybacks this quarter.

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The Dow Jones Industrial Average climbed 0.8% to 35,405, the Nasdaq Composite gained 0.8% to 14,346 and the S&P 500 was 0.7% better to 4,546.

After the bell, Google parent Alphabet surged another 7% or so after announcing a massive Q4 beat and an equally sizable stock split. GOOGL reported 32% year-over-year revenue growth to a record $75.3 billion to easily beat estimates of $72.3 billion. Meanwhile, earnings of $30.69 per share easily cleared consensus expectations for $27.34.

The company also said its board of directors had approved a 20-for-1 stock split on each share of Class A, Class B and Class C stock. Shareholders still must approve the measure. If passed, shareholders of record as of the July 1, 2022, close, would receive on July 15, 2022, a dividend of 19 additional shares of the same class of stock for each share they held.

Other news in the stock market today:

• The small-cap Russell 2000 enjoyed a 1.1% improvement to 2,050.
• U.S. crude oil futures eked out a marginal gain to settle at $88.20 per barrel.
• Gold futures rose 0.3% to finish at $1,801.50 an ounce.
• Bitcoin waffled back and forth for most of the day and finished up just 0.1% higher, to $38,527.63. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• AT&T (T) stock fell 4.2% today after the telecommunications firm said it will divest its WarnerMedia properties, which include HBO, CNN, TNT, TBS and Warner Bros. Studios, as part of its planned merger with Discovery (DISCA). The spinoff will give T shareholders 0.24 share for each share they currently own. AT&T also said it will slash its annual dividend, to $1.11 per share from $2.08 per share – a move that was widely expected and caused T to end its reign as an S&P 500 Dividend Aristocrat.
• Pitney Bowes (PBI) shares slumped 15.4% after the logistics company reported earnings. In its fourth quarter, PBI reported adjusted earnings of 6 cents per share, missing the consensus estimate for earnings of 11 cents per share. The firm also reported an 8.7% year-over-year decline in global e-commerce revenue, though total revenue of $983.7 million in revenue came in above analysts' average estimate for $691.6 million in sales.
• Cruise stocks were a bright spot on Wall Street today. Among the day's big winners were Carnival (CCL, +5.7%), Norwegian Cruise Line Holdings (NCLH, +3.7%) and Royal Caribbean Cruises (RCL, +4.4%).

The 'January Barometer' Bodes Poorly for Equities, But ...

January performance isn't the market indicator it used to be.

Ryan Detrick, chief market strategist for LPL Financial, recently examined the "January Barometer," first discussed in 1972 by Yale Hirsh of the Stock Trader's Almanac.

Traders sum it up like this: "As January goes, so goes the year."

Specifically, when the S&P 500 has closed January in the green, the index has finished up an average of 11.9% over the final 11 months, and higher 86% of the time. But when the S&P 500 finished January in the red, stocks rose just 2.7% on average in the final 11 months and were higher only 62% of the time.

The good news? "It is worth noting that the January Barometer has been broken lately," Detrick says. "In fact, nine of the past 10 times stocks were lower in January, the final 11 months were higher, with some huge gains in there."

The takeaway? Although hoary market sayings and historical indicators can be entertaining and occasionally useful, past performance – as always – is not indicative of future returns.

The wisest move most investors can make is to build a strong portfolio core tailored to their risk tolerances and goals. Vanguard is among a few fund providers that can help you prepare for just about any eventuality, for a song.

To that end, we've focused on handling 2022's specific challenges – inflation, rising interest rates – in our list of 2022's best Vanguard funds. These stock- and bond-funds are constructed to both benefit from and defend against many of this year's trends.

Shareholders in AT&T (T, $32.24) aren’t quite sure just how to react to Monday's news that the company would essentially undo its $85 billion acquisition of Time Warner – a deal that was widely criticized when it closed in 2018.

Indeed, shares in the blue-chip telecommunications giant popped as much as 4.8% at one point in Monday's early trading. However, those gains were pared back significantly by the early afternoon.

Income investors who have come to count on AT&T's generous dividend (currently yielding 6.5%) might want to hold their applause, however.

AT&T signaled that it will cut its dividend to reflect the company's smaller size once it spins off its media business into a separate entity.

Based on what shareholders get out of the deal, that’s not necessarily a bad thing. But it does make it all the more important for current and prospective T shareholders to understand the ins and outs of this pending deal, and AT&T's new place in the streaming video wars.

The AT&T-WarnerMedia-Discovery Deal

AT&T and Discovery Communications (DISCA, $35.65) rocked the communications industry before Monday’s opening bell by announcing a mega-deal that would combine their formidable cable and streaming media assets.

AT&T, which says it expects to receive $43 billion between cash and securities in the deal, will spin off WarnerMedia properties such as HBO, CNN, TNT, TBS and Warner Bros Studios. Those properties will combine with Discovery assets such as Food Network, Animal Planet and HGTV to form a new publicly traded company. The as-yet-to-be-named media firm will also own streaming media assets HBO Max and the newly launched Discovery+.

T and DISCA hope that the resulting entity will possess the scale and resources to compete with the likes of Netflix (NFLX) and Walt Disney (DIS) in the rapidly expanding streaming media business.

The new company – which is expected to be formed by mid-2022 – will have some catching up to do. HBO Max and HBO combined have about 44 million U.S. subscribers. Discovery+ has roughly 15 million subscribers. Meanwhile, Netflix has more than 200 million global subscribers, and Disney+ has more than 100 million.

But back to AT&T.

Why Is the Dividend Getting Cut?

AT&T said it expects an annual dividend payout ratio of 40% to 43% from more than $20 billion of expected free cash flow. That implies a total payout of between $8 billion and $8.6 billion.

That would represent a steep drop from the $15 billion AT&T paid in dividends in 2020, when free cash flow – or the cash left over after operating costs and capital investments – came to more than $40 million. Morgan Stanley analyst Simon Flannery points out that it would mark "a nearly 50% reduction from current levels ... and would put the stock on a low 4% (yield)."

Although income investors might have to accept less in the way of dividend income, that doesn't mean this is automatically a bad deal for them.

For one thing, it bolsters T's balance sheet. The telco took on tremendous debt when it acquired Time Warner. As of March 31, AT&T carried net debt of $169 billion.

Some analysts and investors worry that the sheer weight of all that debt hampers AT&T's financial flexibility. Telecoms have enormous capital expenditures. They must continuously expand, maintain and upgrade their networks.

The advent of next-generation ultra-high-speed networks only adds to the cost pressure. Indeed, AT&T spent $23.4 billion on wireless spectrum licenses in the Federal Communications Commission's most recent round of auctions.

And although AT&T is spinning off its media assets, the structure of the deal with Discovery still allows current T shareholders the potential to profit from the growth of streaming media and content in general.

Under terms of the deal, AT&T shareholders will hold a 71% stake in the combined media company, in the form of new shares. Discovery shareholders will own the remaining 29% stake. In return, AT&T will receive $43 billion of cash, debt securities and WarnerMedia’s retention of certain debt. The new media company will carry about $55 billion in debt.

Whether the new media company pays dividends remains to be seen, but it certainly will have higher growth prospects than AT&T. But the eventual spinoff and new shares will force current holders of both T and DISCA to re-evaluate their holdings.

Bank of America Global Securities analysts, who rate T at Buy, are optimistic about what this deal could mean for shareholders.

"Given a choice between acquiring new media assets and spinning out a pure play, we believe shareholders are benefited by the latter," writes BofA analyst David Barden in a note to clients. "A combined entity would have an enhanced ability to offer the widest variety of content to attract the largest possible subscriber base on a global basis."

Income investors may be forgiven if they're still shell shocked a year after they suffered a tsunami of dividend cuts, suspensions and cancellations the likes of which the market has rarely seen.

In 2020, investors could hardly keep up with the daily drumbeat of bad dividend news. Even immense blue-chips like Walt Disney (DIS), a stalwart dividend payer and component of the Dow Jones Industrial Average, were turning off the spigots that return cash to shareholders. Heck, Disney's dividend remains suspended to this day.

Happily, the flood of dividend cuts and cancellations we saw last year has slowed to barely a trickle in 2021. But that doesn't mean the wider stock market has been totally kind to income investors' wallets. A look beyond the S&P 500 reveals that we're not completely safe from bad news as far as dividend cuts are concerned.

Perhaps just as important, although some companies have since reinstated their dividends after suspending them for a time, the reinstated payouts are far less than what income investors had come to expect.

To get a sense of where income investors remain at peril, we screened the Russell 3000 for key recent dividend cuts, suspensions and cancellations. Have a look at the three most notable dividend decreases of the past three months.

Share prices and other data are as of June 30, unless otherwise noted. Dividend yields are calculated by annualizing the most recent payment and dividing by the share price.

• Market value: $205.5 billion
• Action: Dividend decrease
• Annual dividend prior to change: $2.08 per share*

Big changes are coming to AT&T (T, $28.78) in 2022.

On May 17, the telecom giant announced that it was spinning off WarnerMedia – which it acquired in June 2018 for $85 billion – and merging it with Discovery Communications (DISCA), the company behind cable networks such as HGTV, Animal Planet, and the Food Network.

Together with HBO, CNN, TBS, the Warner Bros. movie studio and other media properties, the combined entity will have the scale necessary to compete with Netflix (NFLX), Disney (DIS) and the rest of the entertainment industry's behemoths.

AT&T will receive $43 billion in cash, debt securities and the assumption of some of WarnerMedia's debt by Warner Bros. Discovery, the new name of the combined entity. AT&T and its shareholders will own 71% of Warner Bros. Discovery.

However, dividend investors won't be getting the same payout they've become accustomed to once the combination is completed in mid-2022.

According to AT&T CFO Pascal Desroches' June 15 update to shareholders, the company will pay out between $8 billion to $9 billion annually for dividends. That's approximately 40-43% of the $20 billion or more in free cash flow it expects to generate once WarnerMedia's been spun off.

In the first quarter ended March 31, AT&T paid out $3.83 billion in dividends. That's $15.32 billion on an annualized basis. Based on the midpoint of the company's dividend payout guidance post-closing, AT&T will reduce its dividend by 45% to an estimated $1.19 per share.

The cut won't take place until the transaction is completed. The good news is that it plans to invest the savings in 5G and its fiber network, increasing its annual capital investment to $24 billion.

Analysts are mixed about the move.

"Everybody recognizes that [AT&T] is a lumbering old giant with slower growth prospects and a lot of debt. So, I think they've done this transaction in an attempt to change the perception of the company to something with some more growth characteristics," Baskin Wealth Management president David Baskin told the Cantech Letter in early June.

* The cut has not occurred yet. This is based on an AT&T projection.

• Market value: $5.0 billion
• Action: Dividend decrease
• Annual dividend prior to change: $1.23 per share

Antero Midstream (AM, $10.39) gave investors a jolt in mid-February when it slashed its dividend 27% in order to allocate more capital to infrastructure investments.

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The operator of pipelines and storage facilities for natural gas, liquid natural gas, and water handling and treatment, slashed its annual payout to 90 cents a share from $1.23 a share.

The move allows AM to boost capital expenditures by about $65 million, notes Raymond James analyst J.R. Weston, who rates the stock at Market Perform (the equivalent of Hold).

"While we've previously cautioned of the AM financial model attempting to 'thread the needle,' and the stock has persistently traded with a double digit dividend yield, we still expect the dividend cut will surprise some investors," Weston said in a note to clients.

UBS analyst Shneur Gershuni, who rates the stock at Neutral (Hold), largely agrees with Weston's take on events.

"While AM's headline dividend cut supports future near term volume growth, lowers leverage and creates a fresh cash flow entity, the optics of cutting to raise capex was not well received by investors," Gershuni writes.

Shares in Antero Midstream plunged more than 12% after the Feb. 18 disclosure, which is typical after stocks announce dividend cuts. However, it managed to reclaim the lost ground in a matter of weeks. And even after a bout of recent weakness, AM is up more than 35% for the year-to-date through the end of June, beating the S&P 500 by more than 20 percentage points.

At 90 cents per share annually, AM's dividend yield based on the June 30 closing stock price comes to 8.7%.

Analysts' consensus recommendation on AM stock stands at Hold, according to data from S&P Global Market Intelligence. Their average annual earnings growth forecast stands at 3% over the next three to five years.

• Market value: $17.9 billion
• Action: Dividend decrease
• Annual dividend prior to change: $1.48 per share

Healthpeak Properties (PEAK, $33.29), a real estate investment trust (REIT) that invests in life sciences, medical offices and senior housing properties, cut its dividend in February by 19%.

The most recent quarterly dividend of 30 cents per share – down from a previous payout of 37 cents a share – will result in annual dividend savings of about $150 million. At a projected $1.20 a share annually, PEAK's dividend yield comes to 3.6% as of the end of June.

Analysts applaud the REIT's efforts to transform its portfolio by selling its more than $4 billion senior housing portfolio, but note that the asset sales are also a drag on near-term earnings.

Indeed, by one measure, PEAK would appear to have ample resources backing its dividend. After all, the company spent a total of $787.1 million on dividends in 2020 – up from $720.1 million the previous year – and still had $1.6 billion in free cash flow after paying interest on debt.

However, net income in 2020 came to just $413.6 million. When the bottom line has to catch up to the dividend amid a costly repositioning of the business, PEAK's financial prudence is understandable.

Besides, analysts say that reducing exposure to senior housing facilities is a critical strategic move.

"In the wake of the sharp increase in COVID cases in late 2020 into January 2021, we lower our outlook for senior housing given weaker occupancy trends and higher operating expenses," says Mizuho Securities analyst Omotayo Okusanya, who rates PEAL at Neutral (Hold). "Transforming its portfolio to majority life sciences and medical office buildings could result in positive re-rating from the investor community."

Analysts' average recommendation on PEAK comes to Buy. They forecast the company to deliver average annual earnings growth of 3.9% over the next three to five years, according to S&P Global Market Intelligence.

• Market value: $409.8 million
• Action: Dividend decrease
• Annual dividend prior to change: 24 cents per share

National CineMedia (NCMI, $5.07) isn't a movie chain, but it has been hammered by the pandemic in just the same way. The company displays advertising to movie-goers throughout the U.S., and with cinema attendance only just starting to trickle back after a long pandemic drought, revenue has been hurting.

NCMI reduced its quarterly payout to 5 cents a share from 7 cents a share as part of its fourth-quarter earnings release in early March, but analysts say investors shouldn't be alarmed by the move.

Wedbush's Michael Pachter, who rates NCMI at Neutral, says payout reduction was "out of an abundance of caution," as the company has more than enough cash available for dividends, income tax payments, and other fees.

Furthermore, the analyst is cautiously optimistic about the course of its business as theater chains gradually normalize operations.

"We think NCM will be well-positioned within the ad delivery ecosystem once attendance rebounds, but currently low theatrical attendance severely limits NCM’s ability to sell impressions even as advertisers are ready," writes Pachter in a note to clients. "As theatres reopen and the release slate schedule becomes more clear, we view NCM's position as increasingly positive."

At 5 cents a share per quarter, or 20 cents per share annually, the yield on NCMI's dividend came to 3.9% as of the end of June. Analysts' consensus recommendation stands at Hold, according to S&P Global Market Intelligence.

Why would you hunt down the best stocks to buy now for a downturn when the markets are at all-time highs?

The current bull market – currently fueled by cheap money from the Federal Reserve, another stimulus plan and, most importantly, the hopes that some day in the nebulous future, we'll have COVID under control – is going to end. Every bull market does.

That's not why, however. That end, which would occur with a 20% decline from a market peak, could be a long time coming. The reason why is that even a mere correction, which is a decline of between 10% to 20%, would be enough to rack up sizable losses and shake investor confidence. And several market watchers see the potential for a correction in the coming months.

"Overall, we still believe U.S. equities in general remain vulnerable to a bigger correction than we have experienced thus far- and that this could materialize in Q1 or Q2 with upwards of a -10-15% repricing off the recent highs," says Dan Wantrobski, technical strategist at Janney Montgomery Scott.

"The message from market sentiment and positioning indicators is that equities are ripe for a correction," adds BCA Research.

Naturally, it's better to have an escape plan before you need it. So if at some point the "hopium" disappears, you'll want to be exposed to more defensive stocks – companies that sell vital goods and services, have reliable earnings and, where possible, pay dividends. Almost everything is overvalued now, but these kinds of stocks should hold their value better in a downturn than the rest of the market.

Read on as we discuss 11 of the best stocks to buy now if you want to add some protection against future turbulence. Three specific areas of the market stand out right now: digital infrastructure stocks, healthcare providers and consumer staples stocks – all areas of the market that will be in demand no matter what happens over the next few months.

Data is as of Feb. 4. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

• Market value: $206.2 billion
• Dividend yield: 7.2%
• Industry: Telecommunications

AT&T (T, $28.89) admittedly made some of the worst business mistakes of the last decade, buying both DirecTV and Time Warner. The idea was to get more from its Internet services by adding content to them, but so far, that hasn't worked out quite as planned.

Veteran AT&T executive John Stankey became CEO in July 2020. He replaced Randall Stephenson, who made those bad decisions. His first move was to consolidate the company's entertainment assets around HBO Max, a streaming service that competes with Netflix (NFLX). This meant, among other things, releasing theatrical movies online at the same time they go into theaters.car It's a risk – more people might sign up for HBO Max in the short-term, but top producers, directors and stars might be less willing to sign with AT&T's Warner studio longer-term.

The good news? Demand for 5G wireless service should bail out AT&T to some extent and help it maintain its phenomenal dividend – a hallmark of many defensive stocks.

AT&T currently boasts the fastest 5G network and was a major bidder in the recent auction of new spectrum. This could mean even more debt – AT&T reportedly was seeking another $14 billion in debt on top of the $179 billion in IOUs it carried at the end of 2020, according to S&P Global Market Intelligence data. Still, 5G is essential to the Machine Internet, thus essential to economic growth, and thus essential to AT&T's growth.

Marc Lichtenfeld, chief income strategist at The Oxford Club, insists AT&T has enough cash flow to not only afford its dividend, but keep increasing it and maintain its status among the Dividend Aristocrats. AT&T's high payout is among the top reasons to consider T among the best stocks to buy now for a smoother ride in a downturn.

"Its entertainment business should rebound as the economy recovers and HBO Max is off to a strong start," Lichtenfeld adds.

Sam Hendel, president of Levin Easterly Partners, a New York-based asset manager, says the wireless business was very stable during the pandemic and will continue to generate cash. He also expects Warner Media to recover as the pandemic eases. "The stock at 8 times free cash flow has limited downside," he says.

Robert R. Johnson, a professor of finance at Creighton University's Heider College of Business, adds that AT&T is "attractively priced" at less than 10 times next year's earnings.

• Market value: $228.6 billion
• Dividend yield: 4.6%
• Industry: Telecommunications

Verizon (VZ, $55.14) didn't spend as heavily on content assets as AT&T over the past decade, and thus, its stock wasn't hit as hard by their failure to perform. Most of the value in the former America Online and Yahoo, combined as Verizon Media, was written off in late 2018.

What's left is a purer play in telecommunications than AT&T, with wireless and its FiOS cable unit at its center. Like AT&T, Verizon was a big bidder during the recent frequency auction. Its debt load is a little lighter, too, at $150 billion. VZ has focused on network management and has cut its costs by $10 billion per year, using technology and buying out some executives' contracts.

Jeff Bilsky, co-portfolio manager at Chartwell Investment Partners in Berwyn, Pennsylvania, calls Verizon's wireless services a staple of modern life. "Verizon should be one of the biggest beneficiaries of the 5G craze, he says. "As customers consume more data, both revenue and margins should improve."

"Verizon's laser focus on going all-in on 5G positions it as a strong investment opportunity with a strong yield," says Daniel Milan, managing partner of Cornerstone Financial Services in Southfield, Michigan. He is very bullish on 5G, which uses spectrum from the low frequencies of broadcasters to the highest ones of satellites. "Not making big bets on media has allowed Verizon to invest billions in the network."

Yale Bock, founder of YH&C Investments in Las Vegas, agrees that "consumers will keep paying" for wireless service, giving Verizon a sound revenue base. That stability makes VZ one of the best stocks to buy now to take a defensive stance.

• Market value: $159.0 billion
• Dividend yield: N/A
• Industry: Telecommunications

T-Mobile US (TMUS, $130.60) completed its acquisition of Sprint in April 2020. The all-stock transaction put the merged entity in good position entering the recent auction of new 5G spectrum, as it already has most of what it needs on that front.

T-Mobile is now busy buying equipment to build out its assets, and has already signed to spend $2.1 billion advertising 5G service through Initiative, part of Interpublic Group (IPG).

In May 2020, Mike Sievert replaced CEO John Legere, whose long hair and T-shirts defined the company's advertising for nearly a decade. Sievert has spent most of his career in marketing, including a stint at AT&T. He was hired as chief marketing officer by Legere in 2012.

Chartwell's Bilsky says that despite past outperformance relative to its rivals, T-Mobile still might have the best upside, even in a downturn. "T-Mobile now has the potential to steal significant market share," he says, and investors might be underestimating that.

Ryan Johnson, director of Portfolio Management & Research at Buckingham Advisors, a wealth advisor in Dayton, Ohio, believes T-Mobile has an edge in 5G that could last a year or more. He also thinks there are more cost savings to come from the Sprint merger.

"Earnings per share may triple from 2021 to 2024," he adds.

• Market value: $100.8 billion
• Dividend yield: 0.4%
• Industry: Industrial conglomerate

General Electric (GE, $11.45) is one of the "fallen angels" of the last decade. The mistakes made by former CEO Jeff Immelt, like buying Alstom's energy business in 2015, and hiding the damage from shareholders, are now legend.

Saving the company from bankruptcy was a close-run thing. But Larry Culp – recruited from the Harvard Business School after building Danaher (DHR) into a medical equipment conglomerate now worth more than GE – seems to have done it.

"CEO Lawrence Culp, who took over in October 2018, has long been known for his focus on cash," says Argus Research's John Eade, who has a Buy rating on GE and calls it a deep value idea. "His previous company, Danaher, has a multidecade history of generating more free cash flow than net income, and we have expected him to focus on this metric at GE.

"The company achieved more than $2 billion in operational cost reductions and $3 billion of cash preservation to mitigate the financial impact of the pandemic."

GE's biggest business is in turbines. This includes power turbines that create power from natural gas and wind turbines that create electricity from moving air, as well as jet engines that power jet planes. The usually reliable jet engine business has been hurt by the pandemic and the Boeing (BA) 737-MAX scandal. The power turbine market has also been weak during the pandemic.

But there's another big business at GE – one that Culp is familiar with from his time at Danaher. Healthcare is an "exceptional" business, says YH&C Investments' Bock. Since selling GE Healthcare's biopharma unit to Danaher to help the balance sheet, GE has become a buyer of other companies again. Its first acquisition is Prismatic Sensors, a Swedish company whose photon-counting technology can directly benefit GE Healthcare's CT scanners.

Now that General Electric has right-sized itself, its blend of businesses actually make GE more of a defensive play again, putting it among the best stocks to buy now to add ballast to a portfolio.

• Market value: $35.4 billion
• Dividend yield: N/A
• Industry: Healthcare plans

Centene (CNC, $60.40) earns its money managing Medicare and Medicaid contracts. It does this through managed care, in which it controls spending through contracts with front-line clinics, as well as acute care facilities such as dialysis centers, and by controlling drug disbursement.

The model proved very popular on the Healthcare.gov exchanges created under the Affordable Care Act, as the company could offer lower prices than traditional insurers.

Centene has already made an M&A move in this young year, agreeing to buy Magellan Health (MGLN) for $2.2 billion. Deutsche Bank analyst George Hill praises the Magellan buy, which focuses on specialties new to Centene, such as mental health. It also brings in 5.5 million new government patients, 18 million specialty health customers, and 16 million medical pharmacy members.

"Centene will double the lives covered in mental health and establish one of the largest behavioral health platforms in the U.S., with 41 million unique members," Hill says.

Centene trades at just 11 times earnings estimates. Part of that is because margins are thin, though, with just 2% of revenues hitting the bottom line. That means growth has to come from acquisitions, from low bids on the exchanges, or from new government health contracts.

"The more challenging the economy and the fewer people who have medical coverage from employers, the greater potential there is for them to seek Medicaid coverage," says Sam Hendel, president of Levin Easterly Partners in New York. He adds that Centene is a defensive stock "with a low correlation to economic or stock market weakness."

The analyst community also throws its weight behind CNC shares. Thirteen of 17 pros covering Centene put it among their best stocks to buy now, with an average $82.15 price target that implies 36% upside from current prices.

• Market value: $96.1 billion
• Dividend yield: 2.7%
• Industry: Pharmacy, healthcare plans

CVS Health (CVS, $73.00) isn't just a pharmacy chain. Instead, it's more of a total healthcare system, also offering doctor's visits, managed care through Aetna, and a pharmacy benefit management system that gives it control over drug costs.

The Aetna acquisition, in 2018, boosted revenues by $60 billion annually year. Like Centene, it's built for hard times.

In November, analysts at CFRA Research in New York reiterated their strong buy rating on the stock. Analyst Kevin Huang wrote that he didn't expect Amazon.com's (AMZN) PillPack offering to damage CVS. And there's reason to believe that Amazon won't necessarily cripple the competition in every business it touches. The company already decided earlier this year to shutter its Haven Healthcare – a joint-venture effort at managed care with Berkshire Hathaway (BRK.B) and JPMorgan Chase (JPM). The decision emphasized the size of CVS' moat in pharmacy and managed care.

YH&C Investments' Bock holds CVS in some client portfolios because of its size, consistent cash flow and profitability. The analyst community is also strongly bullish on the pharmacy chain, giving it 21 Strong Buys or Buys against six Holds and no Sells of any kind. In addition to its attractiveness as a defensive stock, they believe CVS has about 18% upside in it over the next 12 months.

• Market value: $314.5 billion
• Dividend yield: 1.5%
• Industry: Healthcare plans

You might be noticing a trend: Health insurers make for pretty defensive stocks. No wonder, then, why we're also including UnitedHealth Group (UNH, $329.32). UNH is America's largest health insurer, and one of its most profitable, squeezing out a roughly 6% net margin on its $257.1 billion in 2020 revenues.

UnitedHealth dominated the past decade thanks in part to the technology platform built by its Optum unit. Its decision to buy Catamaran, a pharmacy benefit manager, in 2015 gave it greater control over drug costs.

Buckingham Advisors' Ryan Johnson believes UNH would weather a market downturn thanks in part to the growth of Optum, which delivers half its operating income.

"These businesses are focused on lowering costs, which is attractive in any environment," he writes.

UnitedHealth also has more than 8 million customers outside the U.S., mostly in Asia and South America, providing a little geographic diversification. And UNH's strong free cash flow and low debt, relative to its market value, should allow it to continue making acquisitions as it spies opportunities to grow.

CFRA's Sel Hardy believes UNH is among some of the best healthcare stocks to buy now, rating it a Strong Buy in part on optimism for the recent $13 billion acquisition of health-tech firm Change Healthcare.

"We cut our '21 EPS (Dec.) estimate by $0.20 to $18.65 as we trim our Q1 EPS estimate due to rising medical costs trend," Hardy says. "Following the closure of Change Healthcare transaction in H2 2021, we might revise our estimates up."

UNH isn't a big yielder, at just 1.5%, but its $1.25-per-share quarterly payout is 150% larger than it was five years ago. If UnitedHealth continues to upgrade its dividend at a brisk rate, current shareholders should enjoy a much better yield on cost over time.

• Market value: $35.0 billion
• Dividend yield: 3.6%
• Industry: Packaged foods

General Mills (GIS, $56.90) is as essential to the history of Minneapolis as Coca-Cola (KO) is to Atlanta, or Procter & Gamble (PG) is to Cincinnati. It's also an important holding for defensive investors.

General Mills' brands include Cheerios cereal, Yoplait yogurt, Pillsbury dough, and Häagen-Dazs ice cream, as well as Green Giant frozen vegetables, Totino's pizza, Progresso soup and Annie's organics. While the stock itself has effectively gone nowhere over the past five years, it trades for a reasonable 15 times earnings, yields more than 3%, and most importantly, has been extremely resilient during numerous market downturns.

"The company is now in a fundamentally better place than it was prior to 2020," write Credit Suisse analysts, who rate the stock at Outperform. The big risk to margins remains inflation, which management thinks it can hold down to 3%, hedging most of its exposure to rising commodity prices. Productivity also has increased by more than 4%, and GIS has been able raise list prices on some items. Credit Suisse expects about 10% upside on the stock based on normal conditions.

Argus Research rates GIS at Hold but admits it's a stock they "would like to get on our Buy list."

"We like management's efforts to create a differentiated portfolio of brands for health-conscious customers and to generate a higher percentage of revenue from new products," Argus analyst Christopher Graja says.

• Market value: $14.2 billion
• Dividend yield: 3.2%
• Industry: Packaged foods

Campbell Soup (CPB, $46.93) is one of the first names people think of when the economy goes sour. While it's typically a good performer in down markets, and while the pandemic caused a brief rush on the company's soup, emptying shelves, other issues have weighed on shares since.

Still, it could be one of the best stocks to buy now for a defensive posture.

CEO Mark Clouse, who took the helm in early 2019, had been CEO of Pinnacle Foods before its acquisition by Conagra (CAG) and spent most of his career in Kraft's snack division, renamed Mondelez International (MDLZ) after its spinoff. CPB shares are up 33% since Clouse came aboard, underperforming the market but marking a clear turnaround after a couple years of declines.

Levin Easterly Partners' Hendel, who calls Clouse "a strong CEO," acknowledges that soups are in a secular decline. Regardless, he notes that the consumer staples sector has "held up very well during the pandemic" and, in a downturn, investors will pay more for these stocks' earnings thanks to their stability.

Growth in 2020 was led by Campbell's "meals and beverage" division, which includes V8 juices, broths and Prego sauces, as well as the namesake soup. Clouse has shed Campbell's baking aisle, selling the Ecce Panis artisan bread brand to Jimmy's Cookies earlier this year. He is also closing a snack plant in Georgia that had been part of Snyder's-Lance, which it bought for $6.1 billion in 2018.

Argus Research has a Hold rating on shares but left the door open to "potential scenarios under which we could become more bullish on CPB." That was after the company raised its dividend 6% in December.

YH&C Investments' Bock notes Campbell's dependable cash flow and income that should help it survive another market downturn.

• Market value: $211.7 billion
• Dividend yield: 3.4%
• Industry: Beverages

Coca-Cola (KO, $49.01) is a company that, of late, deserves a little more explanation. They're not just about sugar. They're about safe drinking water at $10/gallon. Coke now has eight different brands of bottled water, including Dasani and SmartWater.

They're about so much more, too. Under James Quincey, an Englishman who became CEO in 2017, Coca-Cola has focused on improving margins and its image, selling sugary soda in smaller cans, and severing ties to a pro-sugar group accused of slanting its research. His biggest acquisition so far has been Costa Coffee, an English chain of coffee shops similar to Starbucks (SBUX). He also bought up the 57.5% of Fairlife, a milk company, that Coca-Cola didn't already own.

But it hasn't been all additions. Argus Research's Graja, who rates Stock at Buy, notes that Coca-Cola "eliminated more than 600 'zombie,' or unproductive, products in 2019 and worked to reposition the business through changes in core products."

"We expect Coke to be a stronger company when the pandemic fades," he says. "We expect the combination of more focused marketing and a more profitable brand portfolio to boost earnings and the share price as the away-from-home business rebounds."

Creighton's Robert Johnson, co-author of Investment Banking for Dummies, says KO is one of the best stocks to buy now in anticipation of any market downturn thanks in part to its steady dividend, which has been improved upon for 58 consecutive years. He also notes that its market share in juice, water, bottled tea, coffee and even energy drinks gives Coke a diversified revenue stream.

• Market value: $47.2 billion
• Dividend yield: N/A
• Industry: Auto manufacturing

Ford (F, $11.37) has long been a dirt-cheap automaker, both in nominal price and valuation. Ford shares only recently broke the $10-per-share level, and currently trade at just 10 times forward-looking earnings estimates.

The company was in rough shape last year, suspending its dividend in March to conserve cash during the pandemic. While it reported a $1.28 billion net loss in 2020, the company says it should earn between $8 billion and $9 billion in adjusted profits (pretax) in 2021, and turn about $3.5 billion to $4.5 billion of that into adjusted free cash flow. Some believe it could reboot its dividend as soon as this year.

While electric car stocks have lapped those from traditional automakers like Ford, the firm is still in the race with an electric Mustang Mach-E and a stake in Rivian, an electric truck startup. The firm also plans on investing $29 billion in EVs and autonomous vehicles over the next four years. Fortunately, Ford's F-series trucks remain in heavy demand, throwing off the cash the company needs to play catch-up in electrics.

Cornerstone Financial's Milan says "Ford is finally positioning itself well to be major players in the electric vehicle space," especially in high-margin truck and commercial van markets.

Joseph Hogue, founder of the Let's Talk Money! channel on YouTube and a former Wall Street analyst, thinks Ford "could keep heading higher on a strong outlook for auto sales." With a personal savings rate of 13% during the pandemic, a multidecade high, Americans "could be thinking of larger purchases" like a new car.

Creighton's Robert Johnson adds Ford has "a solid corporate governance and management team in place" and even prefers Ford at current levels to Tesla (TSLA). But that's because its dirt-cheap price provides a level of defense.

"Investors committing funds to Ford have a much higher margin of safety" than those in Tesla, he says.

While the markets have rebounded from last year’s late plunge somewhat in 2019, there’s still one positive remnant from the selloff. Dozens of high-quality blue-chip stocks have been cut in price enough to lift their dividend yields above 4%.

At present, familiar names from the consumer staples sector are combining decades of steady dividend growth with near-record yields and bargain-priced valuations.

Energy stocks – which already were depressed due to weakened energy prices – were hacked even deeper. But these companies have already responded to market adversity over the past few years by shedding poorly performing assets, trimming costs, repurchasing stock and paying down debt. Some of those same companies were able to keep raising dividends, too, and now are positioned to survive in lean times and thrive as energy prices recover.

Even some international stocks’ yields are ballooning thanks to Brexit fears and a slowdown in several countries’ growth.

As a result, each of these 14 blue-chip dividend stocks currently off yields of 4% or better – with the highest payers delivering more than 6%.

Data is as of Feb. 21. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price.

• Market value: $224.6 billion
• Dividend yield: 6.6%

Already well-known for its TV, mobile and broadband businesses that serve nearly 160 million subscribers, AT&T (T, $30.83) recently closed on an impressive portfolio of entertainment assets. Through the 2018 acquisition of Time Warner – which includes the Turner, HBO and Warner Brothers businesses – AT&T gained one of the world’s largest TV and film studios and a world-class library of entertainment content.

During the final quarter of 2018, AT&T reported profits of 78 cents per share to easily beat expectations of 65 cents, and revenues of $41.7 billion beat estimates of $41.2 billion. The company also beat the mark on U.S. wireless net additions, adding 2.7 million customers versus 2.2 million expected.

Future growth will come from rolling out 5G service in additional markets and launching a new direct-to-consumer bundled entertainment package. AT&T’s entertainment business began 2019 with the top-grossing movie of the holiday season (Aquaman), which has earned more than $1.1 billion worldwide.

While AT&T’s sizable debt load is a concern for investors, the company plans to use 2019 free cash flow (estimated at more than $26 billion) to trim $12 billion from debt and end next year with a debt ratio reduced to just 2.5 times EBITDA.

AT&T has delivered 35 consecutive years of dividend growth, putting it in the ranks of the Dividend Aristocrats … though growth has been relatively modest at 2.2% annually.

• Market value: $28.0 billion
• Dividend yield: 4.2%

Shares of General Mills (GIS, $46.95) were hit particularly hard by the 2018 market selloff, dropping more than 30% due to fears of slowed top-line growth and a significant debt load. General Mills owns iconic food brands such as Cheerios, Haagen-Dazs, Betty Crocker, Pillsbury, Old El Paso and Nature Valley and generated $15.7 billion of revenues last year.

The company plans to re-vitalize its top-line by launching new products next year that leverage its powerful brand names and strengthening brand management by increased investments in point-of-sale, packaging and sponsorship.

General Mills’ purchase of Blue Buffalo pet food has been a game-changer for its e-commerce business, which grew 50% last year and could hit $1 billion in sales by 2020. Blue Buffalo is the No. 1 pet food brand in specialty and e-commerce channels.

The company is committed to maximizing growth opportunities for the Blue Buffalo brand and extending its track record of double-digit growth. Divestitures are another aspect of General Mills’ portfolio strategy, with plans to sell assets representing roughly 5% of company revenues.

General Mills targets 9%-10% sales growth and 6%-9% operating profit growth this year. Cash flow will be used for capital expenditures (estimated at 4% of revenues), dividends and debt repayment. Over the next two years, the company aims to reduce debt from 4.2 times EBITDA to 3.5 times.

GIS has paid dividends without interruption for 120 years, increased its payout 14 years in a row and hiked dividends 8% annually over the last five years … but because of the size of the Blue Buffalo acquisition, it announced last year that it would freeze dividend hikes for now.

Still, three analyst firms upgraded ratings on the stock during 2018. Also, Standpoint Research analyst Ronnie Moas recently initiated coverage of General Mills with a “Buy” rating.

• Market value: $60.1 billion
• Dividend yield: 4.6%

Energy utility Dominion Energy (D, $74.34) serves more than 7.5 million customers and operates in 18 states. One of America’s largest producers and transporters of energy, Dominion owns $78 billion of assets that provide electric generation, transmission and distribution and natural gas storage, transmission and distribution.

Dominion grew operating earnings 12.5% in 2018 and trimmed debt by approximately $8 billion, achieving its credit quality goals two years ahead of schedule. The company also advanced construction of its Atlanta Coast Pipeline, which is expected to begin operating in late 2019.

In January, Dominion merged with SCANA. This transaction expands the company’s footprint in Georgia and the Carolinas and adds regulated operations that improve Dominion’s risk profile and growth outlook.

Dominion has increased its dividend for 15 consecutive years and generated five-year dividend growth averaging 8.2% annually. The last payout increase was a 10% hike in December.

• Market value: $33.3 billion
• Dividend yield: 4.5%
• LyondellBasell Industries (LYB, $88.50) is one of the world’s largest plastics, chemical and refining operations. Its products are used in food safety, water purification, vehicle fuel efficiency and electronics. The company sells in more than 100 countries and is the world’s largest producer of polymer compounds.

Last August, LyondellBasell paid $2.3 billion for A. Schulman, a leading global supplier of high-performance plastic compounds, composites and powders. The acquisition more than doubles the size of LyondellBasell’s existing compounding business and broadens its presence in higher-margin end markets like automotive, construction materials, electronic goods and packaging.

Other growth initiatives include launching a new Advanced Polymers Solutions operation that combines the company’s traditional strength in automotive applications with Schulman’s more diverse business lines, and breaking ground on a new propylene oxide plant in Texas.

In 2018, LyondellBasell grew its revenues by 13%, though EPS trickled slightly lower, from $12.23 to $12.01. The company also paid out $3.4 billion in dividends and stock buybacks during the year, and increased its quarterly payout for the 10th consecutive year, to $1 per share. That keeps up a double-digit dividend growth rate over the past half-decade.

LYB has enjoyed a slew of upgrades over the past few months, including a December grade hike by Deutsche Bank analyst David Begleiter. He moved the stock from “Hold” to “Buy,” noting that the company trades at the low end of the range for commodity chemical stocks and has an attractive dividend that mitigates risk.

• Market value: $70.1 billion
• Dividend yield: 4.5%

With assets under management totaling $998 billion, Bank of Nova Scotia (BNS, $57.10), which operates as Scotiabank, is Canada’s principal international bank and a leading financial services provider to Latin America. The bank derives 56% of its earnings in Canada and 44% from the U.S., Latin America, the Caribbean and other international markets.

In the past five years, Scotiabank has produced 7% annual EPS growth and 6% annual dividend growth while maintaining its strong capital position. Dividends have been paid every year since 1832.

Last year, Scotiabank made $7 billion in acquisitions that expanded its customer base and earnings, enhance economies of scale and bolster its presence in Canada and Latin America.

Purchasing BBVA Chile doubles its market share in that country and positions Scotiabank as Chile’s third largest private bank. The Canadian acquisitions of MD Financial Management and Jarislowsky Fraser strengthen its wealth management practice, add 110,000 new private customers and 500 new institutional customers, and create Canada’s third largest asset manager.

Scotiabank is differentiated from competitors by a sizable international footprint that enables the bank to capitalize on favorable demographics in Latin America, where only about half of the citizens have bank accounts. Over the past four years, Scotiabank has grown earnings from Latin American operations by more than 70%.

The bank is also focused on improving efficiencies through its Structural Cost Transformation program that is delivering more than $1 billion of annual run rate savings.

• Market value: $227.6 billion
• Dividend yield: 4.0%
• Chevron (CVX, $119.14) is one of the world’s largest integrated energy companies and ranks 19th on the Fortune 500 list. Chevron participates in every aspect of the oil and natural gas industry from exploration and production to refining, marketing and distribution. It also has significant alternative energy operations, and it is the world’s largest producer of geothermal energy.

Chevron grew its bottom line by 61% year-over-year to $14.8 billion in 2018. That was helped by record annual net oil-equivalent production of 2.93 million barrels per day (up 7% from 2017). Gains were fueled by a production ramp-up from Chevon’s Wheatstone field in Australia and from operations in the U.S. Permian Basin.

Earnings from international upstream operations more than doubled year-over-year thanks to higher oil and natural gas realizations. Chevron’s average sales price for crude oil ticked higher from $50 in Q4 2017 to $56 in 2018’s final quarter; natural gas selling prices came in higher, too.

Chevron plans to invest $20 billion in 2019 exploration and production activities, with more than two-thirds of these projects expected to produce cash flows within two years. A new project underway in Kazakhstan taps 9 billion barrels of known recoverable oil and could contain as much as 25.5 billion barrels of oil.

Chevron has hiked dividends for 32 years in a row, including a 6.3% increaseearlier this year. Over the past decade, dividend growth has averaged 6% annually, but slowed to less than 3% in the past five years.

Sixteen of the 24 analysts covering CVX call it a “Buy” or “Strong Buy,” with another seven “Holds.” UBS was the most recent analyst outfit to join the bull camp, upgrading the stock to “Buy” in January, citing the company’s free-cash-flow generation, stability and dedication to the dividend.

• Market value: $255.2 billion
• Dividend yield: 6.0%
• Royal Dutch Shell (RDS.A, $62.36) is an integrated energy giant that operates in 70 countries, produces 3.9 million barrels of crude per day and has interests in 21 refineries. With 2017 revenues of $240 billion, Shell ranks seventh on the list of Fortune 500 companies.

Shell is actively re-shaping its portfolio and has shed more than $30 billion of non-core assets in recent quarters. The proceeds from asset sales has been reinvested in new energy projects that are expected to add 400,000 barrels per day to production and $7 billion to cash flow by 2020.

The 2016 acquisition of BG Group, the U.K.’s third largest energy player, made Shell the world’s leading producer of liquefied natural gas (LNG). The company plans to leverage its strength in this clean energy niche by constructing a massive LNG processing plant in Canada. World demand for LNG is forecast to rise from around 300 million tons currently to 500 million tons by 2030, fueled by growing demand from Asia.

Shell is allocating $25 billion for share repurchases through 2020 and reduced debt by $14.5 billion in 2018. The company also paid its dividend completely in cash this year – a stated goal.

Royal Dutch Shell is rated “Buy” or “Strong Buy” by 10 analysts and “Hold” by just one.

• Market value: $125.3 billion
• Dividend yield: 4.6%

As part of its Strategic Imperatives Plan for accelerating top-line growth, International Business Machines (IBM, $137.84) is downplaying legacy hardware, software and services businesses to focus instead on hybrid cloud computing, analytics/AI, digital and security products. The early success of these initiatives is evidenced by financial results, which show Strategic Imperative revenues up 9% in 2018 and cloud-related revenues up 12%.

IBM’s $34 billion acquisition of Red Hat (RHT) is a game-changer that positions the company as the top solutions provider in hybrid cloud computing. This acquisition also is expected to accelerate revenue growth, expand margins and produce operating synergies that amplify free cash flow growth over the next 12 months. Red Hat produces higher-margin revenues and has been growing its top-line at a 20% annual rate.

The Red Hat purchase is being funded with cash and debt. IBM plans to free up cash for debt reduction by suspending 2020-21 share repurchases. The company had been an aggressive repurchaser of its own shares, buying back nearly $64 billion of stock since 2011 while paying nearly $36 billion of dividends.

IBM has paid dividends every year since 1916 and has raised dividends 23 years in a row. Five-year dividend growth has averaged 11%. With a payout ratio typically less than 50%, IBM is able to grow its payout even amid industry difficulties.

• Market value: $94.4 billion
• Dividend yield: 6.4%

Shares of Altria Group (MO, $50.37) have declined roughly 20% over the past year, pushing the stock’s dividend yield above 6% and around eight-year highs. Altria owns leading tobacco brands such as Marlboro, Skoal and Copenhagen, and also sells premium wines under its Ste. Michelle label.

A big reason for the share-price decline is the huge price ($38 billion) paid by Altria to acquire a 35% stake in Juul, the market leader in e-vaping products. Altria is paying $12.8 billion for a business that generated $1 billion of revenues last year. Citibank analyst Adam Spelman complained in a note to investors that Altria was overpaying for Juul and downgraded his rating on the stock from “Neutral” to “Sell.”

The Juul transaction comes on the heels of shelling out $1.8 billion for a 45% ownership stake in Cronos Group (CRON), a global leader in cannabis products. This deal also includes warrants that could increase Altria’s stake in Cronos to 55% over the next four years.

In its communications with investors, Altria argued that there are significant new growth opportunities associated with Juul’s dominant position in a $23 billion worldwide e-vaping market and highlighted Chronos Group’s leadership role in a global cannabis market poised for rapid growth over the next decade.

Altria’s high recurring revenues, substantial cash flow and low existing debt should facilitate a rapid paydown of acquisition-related debt. Over the past five years, the company has generated 9% annual EPS growth and returned more than $30 billion to shareholders through dividends and share repurchases.

In addition, Altria recently announced a cost reduction program aimed at cutting $500 million to $600 million from annual expenses next year. The cost reduction will offset most of the increased interest expense associated with the Juul and Cronos acquisitions.

Altria Group has grown dividends 49 years in a row and delivered annual growth averaging 10.3% over the past five years. The payout ratio is relatively high at approximately 75%, but the company’s predictable cash flow provides a safety cushion for the distribution.

• Market value: $232.0 billion
• Dividend yield: 4.3%

Wireless services provider Verizon (VZ, $56.15) operates the nation’s largest 4G network, providing access to more than 98% of the American population. Since 2000, the company has invested more than $126 billion in building out its wireless network. Next year, it will spend $17 billion to $18 billion on the same thing, including getting its 5G wireless technology off the ground.

Verizon put out a mixed fourth-quarter report earlier this year. On the one hand, revenues missed expectations and the company said its 2019 adjusted earnings should be flat from 2018. On the other, it added 653,000 postpaid subscribers, which was nearly double the 355,600 that analysts expected.

The accelerated rollout of 5G services during 2019 should provide additional growth momentum. Verizon has partnered with Samsung to launch the nation’s first commercial 5G service in Houston, Indianapolis, Los Angeles and Sacramento.

In addition, the company remains on track to deliver its goal of $10 billion in cumulative cash savings by 2021. Initiatives include zero-based budgeting and an employee buyout program that has already reduced headcount by 10,400 workers.

Verizon generated $34.3 billion in cash flow, which was used to fund $17.6 billion in capital expenditures and $9.8 billion in dividends.While debt appears high at $113.1 billion, Verizon has no significant near-term debt maturities and a comfortable debt-to-EBITDA ratio of 2.3.

Verizon has recorded 14 consecutive years of dividend growth, and its increases have averaged 8.8% annually over the past five years.

• Market value: $118.5 billion
• Dividend yield: 5.4%

Shares of AbbVie (ABBV, $78.75) have taken a beating this year thanks to the announcement of a $4 billion impairment charge in connection with poor clinical trial results from a new cancer drug being developed by Stemcentrx, as well as a drop in Humira sales. AbbVie paid $5.8 billion to acquire Stemcentrx two years ago.

The failure of this one development-stage drug, as well as the dip in Humira revenues, shouldn’t overshadow the steady progress AbbVie has made growing its top line and reducing its dependence on its blockbuster arthritis drug that accounts for 60% of sales. Humira has U.S. patent protection until 2023 but is already facing competition from biosimilars in Europe.

AbbVie recently introduced new oncology drugs (Imbruvica and Venclexta) that are contributing $4 billion to revenues already and are growing at double-digit rates. By 2025, these drugs could add $9 billion to sales. Two new best-in-class immunology agents (Upadacitinib and Risankizumab) are expected to contribute another $10 billion of sales. By 2025, AbbVie expects non-Humira sales to exceed $35 billion versus 2018 total sales of $32.8 billion.

The company has hiked its payout every year for 46 consecutive years, including an 11.5% bump in 2019.

However, Wall Street analysts have soured on ABBV a bit, with only half the analysts covering the stock calling it a “Buy” or “Strong Buy” – the rest are “Holds.”

• Market value: $329.7 billion
• Dividend yield: 4.2%

Integrated energy giant Exxon Mobil (XOM, $77.82) generated $36 billion in cash flow from operating activities – its highest mark in the metric since 2014 – thanks to production gains, better pricing and improvements in its refinery business. Fourth-quarter 2018 liquids production was up 4% year-over-year, thanks in large part to growth in the low-cost Permian Basin.

The company used that cash – as well as $4 billion more from asset sales – to fund $25.9 billion in capital expenditures and $13.8 billion in dividends.

Exxon plans to enhance 2019 production by ramping up activity in key growth areas like the Permian Basin, where it has 38 drilling rigs deployed, and starting up major new drilling projects in Guyana, Brazil and Angola. The company recently made its ninth major offshore discovery in Guyana, acquired additional acreage in Brazil and began producing oil from its Kaombo Project in Angola, where production is expected to reach 230,000 barrels per day.

Exxon also is investing in its refinery operations. The company commenced production at a new line at its Baytow, Texas, processing complex that will produce 1.5 million metric ton of feedstocks per day and supply one of the largest plastics manufacturing facilities in the world. As part of an agreement with China, Exxon is also constructing a massive chemicals plant that will supply plastics feedstocks for the growing Chinese market.

Exxon has a track record of 36 straight years of dividend growth. Over the past five years, dividends have increased 5.6% annually.

• Market value: $48.8 billion
• Dividend yield: 6.0%

International telecom giant Vodafone (VOD, $18.28) ranks as the world’s second largest mobile operator, supplying service to well more than 500 million mobile customers worldwide. The company has its primary presence in Europe, but is also well-represented in higher-growth emerging markets such as Africa, Latin America and Asia. In addition, Vodafone recently paid $22 billion to acquire Liberty Global’s (LBTYA) assets in Germany, the Czech Republic, Hungary and Romania, expanding its footprint in these fast- growing Eastern Europe regions.

New CEO Nick Read has made generating more consistent results and improving the productivity of the company’s assets his top 2019 priorities, along with paying down debt. The company expects to capture $11.5 billion of capital expenditures and cost savings from merging Vodafone India with Idea Cellular, and $615 million of cost synergies from merging Liberty Global’s assets.

During the first half of 2018 – announced in November – Vodafone’s earnings fell due to a write-down on the Idea Cellular merger, but EBITDA improved 2.9% year-over-year and the company upped its EBITDA and free cash flow guidance. Vodafone is guiding for 3% EBITDA growth and free cash flow exceeding $6.2 billion, versus earlier guidance of $6 billion.

Vodafone has maintained or grown its dividend every year in the past decade and recently ensured investors no dividend cut was planned. The dividend will be frozen this year to facilitate debt reduction, but growth is likely to resume next year as cost savings fuel free cash flow growth. The company expects to generate nearly $20 billion of free cash flow over the next three years, which is more than enough to cover $4.6 billion of annual dividends.

Vodafone is rated “Buy” or “Strong Buy” by 11 analysts, “Hold” by two analysts and “Sell” by just one analyst.

• Market value: $142.8 billion
• Dividend yield: 5.8%

Nine years after the Deepwater Horizon rig disaster, BP plc (BP, $42.29) has re-emerged with one of the best drilling portfolios in the oil and gas industry. Spill damages costing $7 billion to $8 billion per year are predicted to drop to less than $1 billion per year beginning in 2020 and should be easily covered by $6.8 billion of annualized free cash flow.

Last July, BP announced its biggest acquisition in 20 years, paying $10.5 billion for US shale assets owned by mining firm BHP Billiton (BHP). This acquisition increases BP’s American onshore oil-and-gas resources by 57% and should quickly help the company’s bottom line. Unlike offshore assets that take many years to develop, the acquired shale assets can be immediately drilled and monetized.

Two new crude oil discoveries in the North Sea are expected to double BP’s production from that region this year, and new natural gas projects are likely to add 900,000 barrels to production by 2021. In 2018, production grew 3% year-over-year to 3.7 million barrels of oil equivalent per day. As a result, corporate profits more than doubled year-over-year to $12.7 billion.

In addition to prolific drilling assets and world-class refineries, BP is building a presence in retail fuel markets in China and Mexico. The company also holds a major stake in the world’s largest solar project developer and investments in India’s renewable energy market.

BP signaled its improving earnings prospects by hiking its dividend 2.5% in the second quarter. This was the company’s first dividend increase since 2014.

Building a dependable portfolio of retirement stocks isn’t easy in today’s world of historically low interest rates and record-high stock prices. The 2.4% yield offered on a 10-year U.S. Treasury note doesn't provide enough safe income to fund a full retirement, nor does the 1.8% average yield among companies in the Standard & Poor’s 500-stock index.

Some investors have channeled more of their retirement money into high-yielding stocks, which provide greater current income and potentially stronger long-term total returns. But beware: Sometimes, eye-popping yields are a symptom of a struggling company that may deliver nothing more than steep capital losses and an eventual dividend cut or suspension.

The 18 high-dividend holdings featured today are different. They are arguably some of the best retirement stocks in the market as we head into 2018. These companies have elevated their payouts for many years, boast dividend yields up to nearly 7% and maintain healthy Dividend Safety Scores – a metric calculated by Simply Safe Dividends to assess a company’s risk of future dividend cuts. In other words, these companies have sturdy fundamentals that support secure, growing dividend income in the years ahead.

Let’s look at the 18 best retirement stocks for 2018.

Data is as of Dec. 5, 2017. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Stocks are listed in alphabetical order. Click on ticker-symbol links in each slide for current share prices and more.

• Dividend yield: 5.4%
• Consecutive years of annual dividend increases: 34
• AT&T (T, $36.55) is a Dividend Aristocrat that has paid higher dividends every year for more than three decades. It’s also the largest communications company in the world, providing wireless service to 153 million customers, enabling 47 million pay-TV connections and supporting 16 million internet connections in service.

AT&T has required $140 billion in capital investments over the past five years to support the behemoth’s array of hard-to-replicate assets. Smaller companies simply lack the financial clout and customer base needed to build competitive infrastructure networks in these areas.

Competition between the major telecom and media giants remains fierce as new technologies, shifting consumer preferences, and mature markets are combining to create growth challenges, as Charles Sizemore points out. However, AT&T has responded by shifting its business mix beyond wireless services over the past few years, first buying DirecTV for nearly $50 billion in 2015, then in 2016 bidding to acquire Time Warner (TWX) – an acquisition it’s now battling with the Department of Justice to clear. Bundling these services together will hopefully reduce churn and squeeze more value out of the company’s existing customer base, providing excellent free cash flow with which to support the dividend.

While the company’s elevated debt load from recent acquisitions and investments means payout growth may remain low over the coming years, the dividend – which provides the highest yield in the Dow Jones Industrial Average – is on solid ground.

• Dividend yield: 3.9%
• Consecutive years of annual dividend increases: 3
• Crown Castle International (CCI, $108.81) is the highest-yielding stock in Bill Gates’ dividend portfolio and the largest provider of communications infrastructure in the U.S.

The real estate investment trust (REIT) owns, operates and leases more than 40,000 cell towers and over 60,000 route miles of fiber across the U.S. Wireless carriers such as AT&T depend on Crown Castle’s infrastructure so they can provide wireless services to consumers and businesses.

Morningstar analyst Alex Zhao, CFA, nailed the appeal of this mission-critical industry, writing, “Favorable characteristics of the tower business model include recurring revenue, high operating leverage, predictable operating costs, and minimal nondiscretionary capital expenditures. Long-term contracts with built-in price escalators lead to high revenue visibility. Additionally, the strong credit quality of tenants, the critical nature of tower assets, and the low tenant churn make the revenue source particularly stable.” It’s no wonder why Bill Gates’ investment manager appears to like Crown Castle for the long-term.

Management’s recent guidance for 2018 reflects more optimism going forward. The company expects adjusted funds from operations (AFFO, an important measure of a REIT’s financial performance) to grow 10% and had the confidence to increase the company's dividend by 11%. Crown Castle's forecast implies an AFFO payout ratio near 75%, which is very reasonable for a REIT – especially one that enjoys a high level of recurring revenue and an investment-grade credit rating.

CCI’s high yield and solid dividend growth prospects, combined with the continued growth of data, make it one of the best retirement stocks for 2018.

• Dividend yield: 4.1%
• Consecutive years of annual dividend increases: 13
• Duke Energy (DUK, $87.96) is a regulated utility company that serves approximately 7.5 million retail electric customers, as well as distributes natural gas to around 1.6 million customers, across the American Southeast and Midwest.

The key to Duke Energy’s appeal as a retirement stock is its stability. Regulated utility stocks essentially act as government-sanctioned monopolies, operating as sole suppliers within their service regions. Constructing power plants and distribution networks is extremely costly, often making it uneconomical to multiple utilities in any one territory. As a result, state commissioners regulate the price utilities can charge customers, providing enough incentive to encourage investments in improving quality and reliability without allowing consumers to be price-gouged.

Morningstar analyst Andrew Bischof, CFA, writes that “Duke operates in highly constructive regulatory regions, particularly in Florida, which allows the firm to recover costs in a timely fashion through supportive regulatory outcomes. … These constructive relationships that management has formed should also help protect Duke if interest rates rise and the company seeks rate relief for a higher cost of capital.”

These qualities have helped Duke Energy pay uninterrupted quarterly dividends for 91 years. Looking ahead, management targets 4% to 6% annual payout growth, which will be driven by mid-single-digit annual expansion in Duke Energy’s regulated electric and gas earnings base.

• Distribution yield: 6.8%*
• Consecutive years of annual dividend increases: 20
• Enterprise Products Partners L.P. (EPD, $24.80) is one of the largest integrated midstream energy companies in the country and has delivered clockwork-like distribution growth for 53 consecutive quarters. The master limited partnership’s (MLP) pipelines, storage facilities and processing plants are connected to U.S. major shale basins and play a critical role in aggregating domestic natural gas liquids to be used in plastics and other goods around the world.

Enterprise Products Partners has rewarded shareholders with many years of distribution growth in part thanks to its stable business model. The integrated nature of its operations reduces the impact of commodity swings, and a significant amount of its cash flow is fee-based and supported by long-term transportation contracts with blue-chip customers.

This Kiplinger Dividend 15 member boasts a healthy retained distributable cash flow coverage ratio of 1.2x over the past year, an investment-grade credit rating and numerous expansion projects under construction. That has the company in prime position to continue delivering safe, growing income for retirement portfolios.

*Master limited partnerships pay distributions, which are similar to dividends, but are treated as tax-deferred returns of capital and require different paperwork come tax time.

• Dividend yield: 3.7%
• Consecutive years of annual dividend increases: 35

Disruption across global energy markets in recent years forced several major oil firms, including ConocoPhillips (COP) and National Oilwell Varco (NOV), to reduce their dividends. But Exxon Mobil (XOM, $82.89) has remained strong, continuing to pay uninterrupted quarterly dividends since 1882.

Morningstar analyst Allen Good, CFA, doesn’t see that changing anytime soon, writing, “The combination of long-life assets and flexible investment in short-cycle assets should safeguard free cash flow in a volatile oil price environment, leaving Exxon able to cover the dividend at oil prices as low as $40 per barrel.”

Exxon’s impressive durability is made possible by the company’s massive scale, disciplined investments and integrated operations. Cash flow is nicely diversified across upstream, downstream and chemical operations globally, so when market is weak, another is likely picking up the slack. And as the largest publicly traded energy company, Exxon Mobil also enjoys greater economies of scale to help lower its operating costs – an important trait in commodity markets. Management has a solid long-term track record of disciplined capital allocation as well, helping the firm enjoy higher returns on capital employed than its major peers.

These factors have allowed Exxon to improve its dividend for 35 consecutive years. Exxon’s current cash flow already covers its payout, and oil prices are bouncing back, positioning the Dividend Aristocrat to continue its dividend growth streak.

• Distribution yield: 5.4%
• Consecutive years of annual dividend increases: 17
• Magellan Midstream Partners L.P. (MMP, $67.02) is a master limited partnership that helps transport, store and distribute petroleum products. The company boasts the longest refined-products pipeline in America and enjoys predictable fee-based profit driven by throughput volume and tariffs, not unpredictable commodity prices.

One of Magellan’s unique qualities is its lack of incentive distribution rights, which give part of an MLP’s incremental cash flow to the general partner. As a result, Magellan retains more cash flow which it can use to internally fund growth projects, boost shareholder distributions and keep financial leverage at a healthy level.

Magellan’s conservatism and mission-critical energy infrastructure have resulted in excellent long-term distribution growth. The company’s distribution has increased 62 consecutive quarters since the company’s IPO in 2001, growing at a compound annual rate of 12% during that time.

Management targets 8% annual distribution growth for 2017 and 2018 with a secure 1.2x distribution coverage ratio. In other words, income investors likely can count on Magellan to deliver the same generous, fast-growing cash flow stream it has become known for over time.

• Dividend yield: 5.7%
• Consecutive years of annual dividend increases: 6
• Main Street Capital (MAIN, $39.91) is an internally managed business development company (BDC) that has more than $3.7 billion in capital invested via its hybrid debt-and-equity strategy.

Congress created the BDC structure in 1980 to facilitate lending to and investing in small- and midsize businesses. Main Street provides debt and equity capital to private companies, earning a return by generating income and capital gains. Investing is all about managing risk, and Main Street Capital has shined here.

The company’s total investment portfolio is spread across nearly 200 companies with an average investment size of just $10 million. No investment exceeds 3.3% of overall portfolio value or income, and the portfolio is well-diversified across geographies, industries, transaction types and end markets.

The firm’s investment-grade debt rating from Standard & Poor’s and internally managed structure also lower its cost of borrowing, which provides the company with a greater margin of safety as it invests.

Main Street Capital has never lowered its recurring monthly dividend, which has increased 73% since the company went public in 2007. Furthermore, distributable net investment income has always covered its payout. Simply put: Main Street has earned its status as one of the best monthly dividend stocks.

• Dividend yield: 4.6%
• Consecutive years of annual dividend increases: 28

Companies focused on brick-and-mortar retail have been out of favor in the market, including National Retail Properties (NNN, $41.54), which has delivered a total return of less than 5% over the past year while the S&P 500 has rallied 22%. But while concerns about the continued rise of e-commerce and shifting consumer shopping preferences are valid for certain companies, NNN appears to be an exception.

National Retail owns more than 2,600 single-tenant properties that are leased to more than 400 tenants – such as Sunoco gas stations and Dave & Buster's (PLAY) – across 38 different industries, and has intentionally avoided retail categories most vulnerable to the e-commerce threat. That strength is clear in its occupancy rate, which has not dipped below 96% for more than a decade.

In fact, CFRA equity analyst Chris Kuiper wrote that “We think NNN is more insulated from retailer woes compared to peers as most of NNN’s tenants are either restaurants or retailers focused on necessity-based shopping such as convenience stores, auto parts/service centers, and banks.”

National Retail’s “triple-net” leases shift the burden of property operating expenses to the tenant, improving the company’s cash flow. That has allowed the company to grow its payout for 28 consecutive years, while maintaining a conservative 70% AFFO payout ratio.

Core funds from operations grew 10.2% year-over-year during the third quarter, and portfolio occupancy remained strong at 98.8%. As long as National Retail keeps producing results like that, it’s well-positioned to remain among the best high-dividend stocks.

• Dividend yield: 3.6%
• Consecutive years of annual dividend increases: 8
• Pfizer (PFE, $35.63) is one of the largest pharmaceutical companies in the world, boasting more than $50 billion in annual revenue. The company’s portfolio includes a range of medicines, vaccines and consumer health care products that are sold in more than 100 countries.

Substantial research and development costs are required to create new medicines and bring them to market. Successful new products enjoy patents that make monopolistic profits possible for several years. As health care spending continues rising and populations age around the globe, Pfizer’s diverse portfolio should see demand for many of its offerings grow in the years ahead.

Morningstar analyst Damien Conover, CFA, writes that “Pfizer’s foundation remains solid, based on strong cash flows generated from a basket of diverse drugs. The company’s large size confers significant competitive advantages in developing new drugs. This unmatched heft, combined with a broad portfolio of patent-protected drugs, has helped Pfizer build a wide economic moat around its business.”

Importantly, the company expects negative revenue impacts from branded products that have lost patent exclusivity to diminish over the next decade. Meanwhile, Pfizer’s growing pipeline potential should reduce the threat of generic competition to some of its legacy blockbuster products. The company has more than 90 projects in development, and management expects a multiyear wave of potential new product launches to begin.

Pfizer has delivered higher dividends for seven years and maintains a healthy payout ratio near 50%. An investment-grade credit rating, recession-resistant products and consistent cash flow generation put this Big Pharma giant among the best retirement stocks to buy in 2018 and beyond.

• Dividend yield: 4.1%
• Consecutive years of annual dividend increases: 9
• Philip Morris International (PM, $105.46) was formed when Altria (MO) spun off its international operations in 2008. Today, Philip Morris sells tobacco products in more than 180 markets around the world, excluding the U.S.

Philip Morris owns six of the top 15 international cigarette brands in the world, including No. 1 Marlboro, and commands an impressive 15.3% global market share (27.9% excluding China). Selling addictive products under those strong brands has helped PM enjoy premium pricing power and double-digit operating margins for many years.

As government excise taxes rise and health awareness increase, fewer consumers are smoking. However, Philip Morris has responded by developing reduced-risk products (RRPs), which present less risk of harm to smokers by heating rather than burning tobacco.

Argus analyst David Coleman recently wrote, “On the positive side, we think that PM’s core businesses remain strong and that its brands will continue to command premium prices. The company’s efforts to develop cigarette alternatives also appear promising in an age of increasing health awareness and regulation, and while cigarette demand may be stagnating, demand for e-cigarettes is growing rapidly in international markets.”

Philip Morris’ sales of RRPs nearly quintupled to 9.7 billion units during the third quarter of 2017, rising from 2.1 billion units a year earlier. Meanwhile, management expects full-year adjusted earnings to grow 9% to 10% in 2017, which should support continued dividend hikes. The company’s payout has increased each year since 2008 and likely will continue rising, providing nice retirement income.

• Dividend yield: 4.5%
• Consecutive years of annual dividend increases: 16
• PPL Corp. (PPL, $35.29) is one of the largest investor-owned companies in the utility sector, generating $7.5 billion in annual revenue. It’s also a little more diversified than your typical utility stock, providing service to more than 10 million customers across the U.S. and the U.K.

Importantly, management has shifted the company’s mix of business away from competitive energy markets, which accounted for 73% of sales in 2010, to be 100% focused on regulated utility operations. As a result, the company’s earnings are highly predictable, and PPL has numerous investment opportunities to profitably grow its regulated rate base in the future.

In fact, Morningstar analyst Andrew Bischof, CFA, believes “PPL has attractive regulated growth opportunities that could produce 5% annual rate base growth through 2021, supported by PPL’s operations in constructive regulatory jurisdictions.”

As a result, management expects the company to record 5%-6% annual earnings growth, which will drive dividend increases of about 4% annually. PPL has paid dividends for an impressive 287 consecutive quarters and offers one of the higher yields in its sector, making it an appealing candidate for retirement income and growth going forward.

• Dividend yield: 3.8%
• Consecutive years of annual dividend increases: 7
• Public Storage (PSA, $211.05) is an industry leader with more self-storage facilities than any company in the world. This REIT has been in business since 1972 and operates thousands of locations across the U.S. and Europe today.

The self-storage industry’s characteristics make Public Storage one of the best retirement stocks. First, tenants’ leases are on a month-to-month basis, which makes regular price increases possible in supply-constrained markets. And despite the relatively short-term nature of leases, switching costs are fairly high, providing very predictable cash flow. Transitioning from one storage unit provider to another is a pain and requires time and money to make it happen.

Public Storage has focused its business on major metropolitan areas that tend to have higher incomes and better population density than others. When combined with its leading scale and low operating costs, these factors have helped this REIT generate operating margins in excess of 50% in recent years.

PSA’s high-quality business model and excellent cash flow generation have enabled it to pay uninterrupted dividends for more than 25 years. The company has increased its dividend each year since 2010, and analysts expect a reasonable 80% AFFO payout ratio next year, so Public Storage should have no trouble continuing its dividend growth streak.

• Dividend yield: 4.7%
• Consecutive years of annual dividend increases: 24
• Realty Income (O, $55.22) has increased its monthly dividend for 80 consecutive quarters and is one of only nine U.S. REITs with at least one “A” credit rating. When combined with its relatively high yield, the company has earned a well-deserved reputation for safe income and growth.

Founded in 1969, Realty Income has built a portfolio of more than 5,000 commercial properties leased out to a diverse group of tenants under long-term contracts. The company’s real estate is focused on prime locations as demonstrated by its resilient occupancy level, which has never dipped below 96%. Management also has managed the company’s mix of tenants conservatively to reduce risk. No tenant is greater than 7% of Realty Income’s overall rent, and its 20 largest tenants represent a reasonable 53% of annualized rent revenue.

Equally important, no industry represents more than 11% of rent, and its largest exposures are to defensive sectors, such as drug stores, convenience stores, dollar stores, and health clubs.

While e-commerce could pose a legitimate long-term threat to many retailers, 20% of Realty Income’s total portfolio rent is from non-retail tenants. More importantly, 77% of its total portfolio rent is from retail tenants characterized by service-driven businesses, non-discretionary industries, low price points, and/or investment grade-rated credit. In other words, it seems unlikely that the rise of e-commerce would harm Realty Income’s business anytime soon. The company seems likely to remain a safe source of retirement income with moderate growth for many years to come.

• Dividend yield: 5.5%
• Consecutive years of annual dividend increases: 24
• Tanger Factory Outlet Centers (SKT, $24.99) is a real estate investment trust with 44 upscale outlet shopping centers spread across the country. These properties are leased out to more than 3,100 stores which are run by over 500 scompanies.

Many investors are spooked by retail-focused companies in the age of Amazon (AMZN), which is why Tanger’s stock has lost nearly a quarter of its value over the past year. However, the outlet mall operator's focus on offering a unique, high-end shopping experience has largely insulated it from any e-commerce headwinds thus far. In fact, management recently raised Tanger’s year-end occupancy guidance to 96.5% to 97%, and the firm continued to grow its AFFO in the latest quarter.

The dividend also remains in good shape considering Tanger’s healthy AFFO payout ratio (expected to be 56% for full-year 2017), an investment-grade credit rating from Standard & Poor's and 56 consecutive quarters of same-center net operating income growth.

Such resiliency and conservatism has allowed the business to boost its payout each year and deliver dividends every quarter since its 1993 IPO. Both trends seem likely to continue.

• Dividend yield: 4.9%
• Consecutive years of annual dividend increases: 7
• Ventas (VTR, $62.73) is arguably one of the highest-quality health care REITs in the market. Approximately 94% of its revenue is from private-pay sources rather than Medicare and Medicaid, which could be pressured as reimbursement models evolve in the future. The company also boasts an investment-grade credit rating and has delivered double-digit FFO-per-share growth annually since 2001.

Ventas focuses on a diverse range of more than 1,200 health care properties, including senior living, medical office buildings, life science and acute care. Management has made several moves in recent years to strengthen the quality of the firm’s property portfolio. The company disposed of almost all of its skilled nursing facilities, as well as acquired acute care company Ardent Health Services and life sciences operator Wexford, positioning it for sustainable growth.

And as the senior population continues aging, Ventas is optimistic about demand tailwinds in the $1 trillion health care real estate market.

Ventas has paid uninterrupted dividends since going public in 1999 and has rewarded shareholders with 8% annual dividend growth since 2001. Health care spending is projected to grow 5.8% annually through 2024, and the REIT maintains a reasonable payout ratio near 75% – two signs that the payout should continue to rise in the years ahead.

• Dividend yield: 4.6%
• Consecutive years of annual dividend increases: 11
• Verizon (VZ, $50.92) is the largest provider of wireless services in the country, boasting approximately 115 million wireless retail customers and providing 4G LTE coverage to more than 98% of the U.S. population.

Smaller rivals T-Mobile (TMUS) and Sprint (S) have put pressure on the wireless market in recent years by offering unlimited data plans and improving the quality of their own networks. As a result, Verizon recorded its first-ever subscriber loss earlier this year and has found it increasingly difficult to maintain its premium pricing.

However, the company has since returned to subscriber growth, and Argus analyst Joseph Bonner, CFA, writes, “The subscriber growth suggests that Verizon is gaining traction from its new unlimited data plans and that industry competition slackened in 3Q.”

While the telecom market’s competitive environment does seem to be changing, Verizon’s dividend remains a solid bet for retirement income. The company and its predecessors boast a track record of paying uninterrupted dividends for more than three decades, and Verizon has boosted its payout for 11 consecutive years.

Management announced a $10 billion cost reduction plan earlier this year, which is expected to be completed by 2022 and fund the company’s dividend through cash savings. Combined with the company’s healthy and recession-resistant cash flow generation and analysts’ forecasts for low-single-digit earnings growth over the coming years, Verizon’s payout should keep improving.

• Dividend yield: 5.3%
• Consecutive years of annual dividend increases: 14

An investment in Welltower (HCN, $66.12) represents a conservative way to play the theme of an aging U.S. population, which is expected to drive higher demand for the real estate investment trust’s 1,334 health care properties.

Specifically, with the 85-plus age group population expected to double in 20 years, Welltower’s focus on senior living (70% of third-quarter net operating income) should provide a nice tailwind for the company’s growth and the security of its dividend. Even better, Welltower’s portfolio is arguably more resilient than many other medical-focused REITs because its tenants don’t depend much on Medicare and Medicaid reimbursements, which could come under pressure depending on how Washington shapes tax and health care legislation in the years ahead.

Instead, 93% of Welltower’s facility revenue mix is derived from private pay. The company’s dividend is further supported by management’s conservatism, which is reflected in Welltower’s investment-grade credit rating and its reasonable AFFO payout ratio, which sits below 90%.

Welltower has paid uninterrupted dividends for more than 20 years and appears likely to continue rewarding shareholders with low-single-digit annual payout increases like it has done for more than a decade, making it one of the best retirement stocks for 2018 and beyond.

• Dividend yield: 5.7%
• Consecutive years of annual dividend increases: 19
• W.P. Carey (WPC, $70.10) is a real estate investment trust that has increased its dividend every year since going public in 1998, recording 19 consecutive years of payout growth. Part of the firm’s success is its focus on maintaining a highly diversified portfolio of assets.

Specifically, its properties are nicely spread among industrial (30%), office (25%), retail (16%) and warehouse (14%) functions; the company’s top 10 tenants combine for only 31.8% of annualized base rent; and the business spans the globe, with roughly two-thirds of its assets in the U.S. and another 30% in Europe.

W.P. Carey generates predictable cash flow, thanks in large part to a 99.8% occupancy rate and a weighted average remaining lease term of nearly a decade. When combined with its investment-grade credit rating and reasonable 75% AFFO payout ratio expected in 2017, WPC’s high dividend appears to be a solid fit for investors living off dividends in retirement.

Brian Bollinger was long CCI, GIS, NNN, PFE, PM, PPL, T and VZ as of this writing.

Investors looking for dividend income won’t find much of it by investing in the average large-company stock. Standard & Poor’s 500-stock index—the major large-cap benchmark—yields just 2%, down from 2.1% a year ago. Investors can scoop up a bit more income in shares of gas and electric utilities, yielding an average of 3.2%. But that’s not much when you factor in inflation, which is running at a nearly 2% annualized rate.

Venture beyond the S&P 500, however, and you’ll find dozens of stocks yielding 5% or more. These aren’t all common stocks. Many are classified as master limited partnerships (MLPs), limited partnerships (LPs) or American depositary receipts (ADRs), which are shares of foreign companies that are listed on a U.S. exchange. These types of securities (along with a few others) aren’t eligible for inclusion in the S&P 500. But that doesn’t make them bad investments. And some look quite compelling as income generators.

Here are five picks (including one in the S&P 500) that yield 5% or more. Each should be able to maintain its payout rate based on its solid underlying business. If their share prices increase by a modest 2% a year—well below the long-term market average—investors can expect annualized total returns, including dividends, to top 7%.

Data is as of Oct. 5, 2017, unless otherwise indicated. Click on symbol links in each slide for current share prices and more.

• Symbol: T
• Share price: $39.51
• Market value: $242.6 billion
• Annual dividend: $1.96
• Dividend yield: 5%

The big wild card with AT&T these days is its proposed merger with Time Warner (TWX)—owner of TV networks (such as HBO) and the Warner Bros. movie studio. The U.S. Justice Department is currently reviewing the deal—valued at $85 billion in cash and stock—and will likely make a decision by the end of the year to either block the merger or approve it with some conditions attached.

Whatever the outcome, investors will get their dividends. AT&T hasn’t missed a payment in decades and isn’t likely to break that streak. With a steady revenue stream—backed by more than 136.5 million subscribers to its wireless and other services—the firm produces abundant free cash flow (the cash profits generated after making the capital expenditures necessary to maintain the business). In the 12-month period that ended June 30, AT&T reported $15.8 billion in free cash flow, more than enough to cover its dividend payments of $11.9 billion.

Granted, AT&T’s stock may be sleepy, at best. The firm is likely to issue a lot more debt and stock to help fund the Time Warner deal, pressuring its balance sheet and potentially its stock. Bank of America Merrill Lynch expects the shares to reach just $39 over the next 12 months, barely moving from recent prices.

Stick with the stock, though, and you’ll likely get a dividend increase. The firm has hiked its payout by an average of 2.2% over the past five years. Backed by ample free cash flow, AT&T can afford to keep raising its dividend modestly.

• Symbol: BX
• Share price: $33.62
• Market value: $21.8 billion
• Annual dividend: $2.16
• Dividend yield: 6.4%

Asset manager Blackstone Group handles more than $371 billion in investments, including private-equity funds, mutual funds and commercial real estate that the firm directly owns. Some of the firm’s revenues come from investment income, interest and dividends. But most of it flows from the huge fees Blackstone charges, based on the size and performance of the funds and other investments it manages.

Altogether, Blackstone hauled $1.5 billion in revenues in the second quarter, up about 30% over the same period a year earlier. After expenses, the firm reported that its “distributable earnings” (effectively the cash paid to shareholders) amounted to 63 cents per share (technically, per unit), up 58% over the prior year.

A prolific deal maker, Blackstone is likely to plow more money into financial assets and real estate over the next few years, too. The firm is a “fundraising machine,” says Credit Suisse, with a strong record of raking in money from big investors such as universities, pension funds and foreign governments.

In May, for instance, Blackstone said that it would launch a new $40 billion fund to invest in infrastructure assets such as toll roads and pipelines, seeded by $20 billion from the government of Saudi Arabia’s investment fund. Those kinds of deals could help push Blackstone’s payout to $6 per share over the next five years, estimates Credit Suisse, well above the firm’s current annualized payout rate of $2.16 per share.

Blackstone isn’t bulletproof, though. A prolonged slump in financial markets would erode asset values and fees. Worst-case, Blackstone could cut its distribution, which would pull down the stock. For now, though, distributions should roll in based on the firm’s fee income and gains in asset prices.

One other note: Structured as a limited partnership, Blackstone issues K-1 forms, rather than a standard 1099 form, for income payments. Distributions may be a mix of capital gains, dividends, interest and other types of income, some of which may complicate your taxes.

• Symbol: EPD
• Share price: $26.29
• Market value: $56.5 billion
• Annual dividend: $1.68
• Dividend yield: 6.4%

One of the largest energy master limited partnerships, Enterprise Products Partners runs a vast network of oil-and-gas pipelines, processing plants, storage depots and export facilities. Oil drillers and other energy producers pay Enterprise fees to transport and process their products, and the revenues flow in based largely on the quantity of oil and gas that Enterprise handles, rather than the price of the commodities.

For income investors, the stock looks solid. Enterprise has raised its payouts for 18 consecutive years. The firm didn’t miss a quarterly increase when oil prices plunged in 2014 and 2015. Distributions have increased at a 6.5% annualized rate since 2004.

Enterprise is investing heavily to keep hiking its payouts, too. The firm says it plans to spend $6 billion through 2019 on new pipelines and other projects that will bring in more cash. One example: a new propane processing plant in Texas that the firm recently started up, with 100% of its capacity contracted for the next 15 years.

The major risk is that energy prices retreat, resulting in lower domestic oil-and-gas production and less demand for pipelines. Enterprise may still make its distributions, but the stock could slide in that scenario.

One other caveat: MLPs issue K-1 forms that may complicate your tax filings. Consult a tax expert before investing.

• Symbol: KIM
• Share price: $19.29
• Market value: $8.2 billion
• Annual dividend: $1.08
• Dividend yield: 5.6%

A real estate investment trust, Kimco Realty owns more than 500 shopping centers throughout the U.S. That might seem like a dying business: Online competition is pressuring sales at department stores and other traditional merchants. Property owners are seeing vacancies rise, and some are lowering rents or making other concessions to tenants to try to keep them in place.

Yet Kimco appears to be weathering this “retail apocalypse,” as it’s known, quite well. The firm has been aggressively selling properties and redeveloping others to focus more on internet-resistant businesses such as health clubs, off-price retailers, warehouse stores and wireless-service providers. Although the firm has lost some tenants, its overall occupancy rate has increased from 93.3% in mid 2012 to 95.5% (as of June 30, 2017). Rent per square foot has also risen, climbing at a 5% annualized rate over the past five years.

Overall, Kimco hauls in more than enough rental income (after covering its expenses) to pay its dividend. Kimco’s funds from operations—a common REIT profitability measure that represents net income plus depreciation expenses—amounted to 41 cents a share in the second quarter, well above the firm’s quarterly dividend of 27 cents a share. Investors are likely to receive a dividend increase over the next year, too, says Bank of America Merrill Lynch, which expects the quarterly payout to reach 28 cents a share, up 3.7%.

• Symbol: RDS.A
• Share price: $61.03
• Market value: $264.2 billion
• Annual dividend: $3.76
• Dividend yield: 6.2%

Many energy producers may be banking on oil prices recovering back to $100 a barrel, up from about $50 now. But Royal Dutch Shell isn’t one such optimist. One of Europe’s largest oil-and-gas producers, Royal Dutch says it has instituted a “lower forever” mindset regarding oil prices, and it’s put its business on a diet to make money in that climate.

The company has cut operating expenses by more than 20% since 2014 and slashed its yearly capital investment budget by more than $20 billion (down from $50 billion in 2014). Royal Dutch is also paying down debt, strengthening its balance sheet as a result. And it has started production at several new oil-and-gas projects to pump up revenues.

The results are now showing up in the bottom line: The company reported earnings per share of $1.96 in the 12-month period that ended June 30, up by 70% over the previous 12 months.

More important for dividend investors, Royal Dutch now earns more than enough money from oil-and-gas production, after covering its expenses, to make its payouts. The firm paid a dividend of $3.76 per share in the last 12 months, covered by $5.96 in free cash flow. Although the firm isn’t likely to increase its dividend substantially (unless oil prices rebound well above current levels), investors should rake in payouts that beat the yields of many other big energy stocks.

When the price of a dividend stock climbs, its yield falls. As a result, a rising stock market, such as we've had of late, can make it harder for income investors to find attractive dividend payers. Indeed, the current dividend yield on Standard & Poor's 500-stock index is just 2.1%, down from 2.3% a year ago. For retirees dependent on investment income, a 2.1% yield won't even keep up with inflation in 2017, according to Kiplinger's latest forecast.

True, investors can buy stocks with unusually high yields, but such names typically come with greater risks. A too-good-to-be-true yield can be a red flag about a company's financial health and an indicator that the dividend isn't sustainable. That's why dependable, high-quality stocks with above-average dividend yields are such important components of a retirement portfolio. Here are four great dividend stocks that are paying double the yield of the blue-chip S&P 500 index.

(All prices and other data are as of January 9, 2017. Figures are based on the average of analysts’ forecasts for calendar 2017, as compiled by Zacks Investment Research, unless otherwise noted. Stocks are listed alphabetically.)

• Symbol: T
• Share price: $40.80
• Dividend yield: 4.7%

The telecommunications services sector is well-known for dividends, thanks in large part to AT&T. The company has paid uninterrupted dividends since 1984 and has raised its payout annually for more than three decades. AT&T’s yield is the highest in Standard & Poor’s 500-stock index, which has a yield of 2.1%

Although phone service remains AT&T’s core business, the company is moving aggressively into pay-TV and content production with acquisitions such as DirecTV and a pending deal to buy Time Warner (TWX), an entertainment giant whose lineup includes CNN, HBO and the Warner Brothers movie studio. Analysts aren’t counting on the deal going through -- at least not without some modifications -- due to antitrust issues. But even without it, AT&T’s profits should still rise by about 5% in 2017, and the company’s strong free cash flow (cash profits, minus the capital expenditures needed to maintain the business) should support its next dividend hike.

• Symbol: F
• Share price: $12.63
• Dividend yield: 4.8%

U.S. auto sales set a record in 2016, but the prospect of leaner times ahead has weighed on shares of Ford. The stock slumped 8% in 2016, including dividends. Yet the market is treating Ford, with a price-earnings ratio of just 8, compared with 17 for the S&P 500, as if profits will fall off a cliff. That shouldn’t be the case. Although car sales are forecast to decline in 2017, they are still expected to remain close to record levels.

• Symbol: GM
• Share price: $36.01
• Dividend yield: 4.2%

As with Ford, the case for investing in General Motors comes down to generous dividends and a bargain-priced stock. Only about three-dozen stocks in the S&P 500 possess yields above 4%, GM being one of them. And GM distributed just 25% of its profits as dividends in the third quarter of 2016, compared with an average of just over 40% for S&P 500 companies, indicating ample room to cover its payout and hike it in the future. Analysts see earnings per share dipping from $6 in 2016 to $5.83 in 2017. But with a P/E ratio of 6, GM’s stock already reflects the expected earnings decline—and maybe then some.

• Symbol: VZ
• Share price: $52.68
• Dividend yield: 4.3%

Dow component Verizon has paid uninterrupted dividends since its name changed from Bell Atlantic in 2000. It can also claim 10 straight years of dividend growth. But the company has more to offer than an income stream.

Verizon is repositioning itself for a world in which mobile content is ubiquitous and digital ads are moneymakers. It purchased AOL for its digital-advertising technology in 2015 and currently has an agreement to buy Yahoo (YHOO). That deal may not go through, partly because of Yahoo’s recent disclosure of a massive data theft impacting more than 1 billion accounts. But Verizon is raking in cash from its mobile business, Fios TV service and other sources. Earnings per share should climb 3.6% in 2017. Throw in a 4.3% dividend yield and you could scoop up total returns close to 8% over the next year if the stock keeps pace with profit growth, as expected.

High-quality dividend stocks never go out of style for long-term investors, and there is no shortage of stocks with high yields and bright prospects for 2017, from telecommunications companies embracing the digital future to pharmaceutical companies riding the success of new drugs.

That's not to say that these stocks won’t fall if the market slumps this year. No stock is without risk. But between their near-term profit potential and sizable dividends, these 10 dividend-paying stocks are poised to deliver better-than-average total returns in the coming months.

(All prices and other data are as of January 9, 2017. Figures are based on the average of analysts’ forecasts for calendar 2017, as compiled by Zacks Investment Research, unless otherwise noted. Stocks are listed alphabetically.)

• Symbol: ABBV
• Share price: $63.79
• Dividend yield: 3.6%

The pharmaceutical sector is a great place to look for generous dividend payers and few stocks sport yields as high as AbbVie’s. The patent expired in December on AbbVie’s Humira, the top-selling anti-inflammatory drug on the market. Even so, investors are optimistic about the company’s new products, such as Imbruvica, a treatment for blood cancer. AbbVie’s shares returned 20%, including dividends, over the past 52 weeks, while the pharmaceutical sector overall was in the red.

Analysts expect robust profit growth for AbbVie in 2017, with earnings per share expected to rise 13% over estimated 2016 earnings on a sales gain of 10%, to $28 billion. That’s well ahead of analysts’ forecast for 9% earnings growth for the broader market, and 8% for the pharmaceutical industry. AbbVie has logged 44 straight years of dividend growth.

• Symbol: T
• Share price: $40.80
• Dividend yield: 4.7%

The telecommunications services sector is well-known for dividends, thanks in large part to AT&T. The company has paid uninterrupted dividends since 1984 and has raised its payout annually for more than three decades. AT&T’s yield is the highest in Standard & Poor’s 500-stock index, which has a yield of 2.1%

Although phone service remains AT&T’s core business, the company is moving aggressively into pay-TV and content production with acquisitions such as DirecTV and a pending deal to buy Time Warner (TWX)—an entertainment giant whose lineup includes CNN, HBO and the Warner Brothers movie studio. Analysts aren’t counting on the deal going through -- at least not without some modifications -- due to antitrust issues. But even without it, AT&T’s profits should still rise by about 5% in 2017, and the company’s strong free cash flow (cash profits, minus the capital expenditures needed to maintain the business) should support its next dividend hike.

• Symbol: CVX
• Share price: $115.84
• Dividend yield: 3.7%

The same forces that propelled Chevron’s stock to a gain of 36% in 2016 should only get stronger in the coming year. After a long slump, oil prices stabilized last year. And now that the OPEC oil cartel has agreed to cut production, prices are expected to rise even more. That's good news for Chevron, a component of the Dow Jones industrial average. The integrated oil company should see profits rise in its drilling and transportation operations, and despite the higher crude prices, in its refining business, too. Analysts forecast revenue to increase from $113 billion in 2016 to $153 billion in 2017. As a result, they expect the company's earnings per share to finally lift off, soaring 276% in 2017 over 2016 levels—far ahead of the tepid 2.5% rise expected for the industry overall.

• Symbol: F
• Share price: $12.63
• Dividend yield: 4.8%

U.S. auto sales set a record in 2016, but the prospect of leaner times ahead has weighed on shares of Ford. The stock slumped 8% in 2016, including dividends. Yet the market is treating Ford, with a price-earnings ratio of just 8, compared with 17 for the S&P 500, as if profits will fall off a cliff. That shouldn’t be the case. Although car sales are forecast to decline in 2017, they are still expected to remain close to record levels.

• Symbol: GM
• Share price: $36.01
• Dividend yield: 4.2%

As with Ford, the case for investing in General Motors comes down to generous dividends and a bargain-priced stock. Only about three-dozen stocks in the S&P 500 possess yields above 4%, GM being one of them. And GM distributed just 25% of its profits as dividends in the third quarter of 2016, compared with an average of just over 40% for S&P 500 companies, indicating ample room to cover its payout and hike it in the future. Analysts see earnings per share dipping from $6 in 2016 to $5.83 in 2017. But with a P/E ratio of 6, GM’s stock already reflects the expected earnings decline—and maybe then some.

• Symbol: IP
• Share price: $53.62
• Dividend yield: 3.3%

As one of the world’s largest suppliers of paper and packaging materials, International Paper may not sound like an exciting business. But it possesses some attractive features. The company dominates the market for containerboard, giving it exposure to rising demand for packaging used by online retailers. For example, the company supplies half of the shipping boxes used by Amazon.com. Analysts expect earnings per share to climb 23% in 2017 over estimated 2016 levels. The firm pays a healthy dividend, too, and it is income you should be able to count on, considering International Paper has paid uninterrupted dividends since 1993.

• Symbol: MRK
• Share price: $61.10
• Dividend yield: 3.0%

A health care stalwart and component of the Dow Jones industrial average, drug maker Merck hasn’t missed a quarterly dividend payment in more than three decades. A recent four-year streak of dividend increases looks likely to continue and Merck’s growth prospects look compelling. Years of acquisitions, along with research and development, have resulted in a slew of successful drugs now on the market. Cancer medicine Keytruda is an ongoing hit, for example, and Merck has more potential winners in the works, with 24 drugs in the latter stages of development. In the 12-month period that ended September 30, 2016, the company generated $9 billion in free cash flow. Analysts surveyed by Thomson Reuters see a 10% increase for Merck's stock in the next 12 months or so.

• Symbol: PFE
• Share price: $33.47
• Dividend yield: 3.6%

Like Merck, Pfizer is a Dow component and a relatively high-yielding stock. Investors worry that the company isn’t producing enough new products to overcome the loss of revenues from drugs that lose patent protection. But Pfizer has invested heavily in research and development, and it made some big acquisitions that should start to produce a new wave of products. Pfizer’s lineup of drugs in development looks promising, with 94 products in the works. Recent successes include breast cancer treatment Ibrance, blood thinner Eliquis and the pneumococcal pneumonia vaccine Prevnar 13.

The company has paid quarterly dividends consistently for decades and has a seven-year history of dividend growth. Earnings per share are expected to rise 8% in 2017, and the dividend looks well-covered. Pfizer paid $7.2 billion in dividends last year and another hike is expected in 2017. The firm's free cash flow is stable, ranging between $10.6billion and $19.3 billion since the last recession ended in 2009.

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• Symbol: VZ
• Share price: $52.68
• Dividend yield: 4.3%

Dow component Verizon has paid uninterrupted dividends since its name changed from Bell Atlantic in 2000. It can also claim 10 straight years of dividend growth. But the company has more to offer than an income stream.

Verizon is repositioning itself for a world in which mobile content is ubiquitous and digital ads are moneymakers. It purchased AOL for its digital-advertising technology in 2015 and currently has an agreement to buy Yahoo (YHOO). That deal may not go through, partly because of Yahoo’s recent disclosure of a massive data theft impacting more than 1 billion accounts. But Verizon is raking in cash from its mobile business, Fios TV service and other sources. Earnings per share should climb 3.6% in 2017. Throw in a 4.3% dividend yield and you could scoop up total returns close to 8% over the next year if the stock keeps pace with profit growth, as expected.

• Symbol: WFC
• Share price: $54.24
• Dividend yield: 2.8%

It's going to take some time for Wells Fargo to rebuild its reputation. The revelation that thousands of employees opened millions of accounts without customers' knowledge cost the CEO his job and continues to hurt business. But like all such scandals, this too, shall pass. Wells Fargo remains a "great bank," in the words of Warren Buffett. He should know. Berkshire Hathaway (BRK-B), the company he heads, is the bank’s largest stockholder. And Buffett hasn’t sold since the scandal broke. That should give investors confidence in Wells Fargo's prospects, but if that's not enough, 2017 is shaping up to be a good one for the entire financial sector. Interest rates are on the rise, which boosts banks' profitability. Financial deregulation -- a stated goal of the new administration -- could also pad the bank’s bottom line.

Over the past year, the television industry has seen more backroom deals and attempted takeovers than a typical episode of House of Cards. Now more than ever, investors need to stay glued to their screens.

A revolution in the way we get our home entertainment is behind the wave of consolidation as companies scramble to broaden their size and reach—as well as jettison divisions that are inhibiting their growth. Flat-screen television sets are competing with apps that let you watch shows on a smartphone or tablet, and cable customers, frustrated by rising prices, are turning to cheaper online alternatives, such as Netflix, Hulu and Amazon Prime.

Complicating matters is the debate over “net neutrality.” Net neutrality refers to a Federal Communications Commission plan to require Internet service providers to transmit all data that travels over their networks at equal speeds. The issue intensified after a federal court struck down FCC rules dealing with net neutrality in early 2014. On February 4, FCC Chairman Tom Wheeler unveiled a new proposal to impose tighter regulation over firms that provide Internet access and treat them more like telecommunications companies. The FCC is expected to vote on the plan on February 26.

The cable sector can be split into two categories: distributors—the companies that own the pipes through which you receive content, such as Comcast (symbol CMCSA, $56.90) and (Charter Communications CHTR, $163.19)—and content providers—the concerns that create and package entertainment, such as CBS Corp. (CBS, $56.74), Time Warner (TWX, $80.14) and Walt Disney (DIS, $101.28), which owns the ABC broadcasting network and ESPN, among other things. (Prices and related figures are through February 4.)

Regardless of how the debate over net neutrality plays out, it’s hard to go wrong investing in a company that produces popular content that can travel anywhere, especially to foreign audiences. Content producers are vulnerable to changes in ad and licensing revenues, subscriptions and programming costs. But as viewership scatters across different platforms and devices, “Quality content will always find an outlet,” writes Morningstar analyst Neil Macker, whether it’s through an online service, a cable package or over the airwaves.

But don’t write off the distributors yet. Despite the growing number of customers who are cutting the cord—Leichtman Research Group reports that pay-TV services lost roughly 150,000 net subscribers in the third quarter of 2014, compared with a loss of about 25,000 in the year-earlier period—major cable companies have found ways to adapt to consumer habits and maintain their leverage. When it comes to delivering high-speed Internet services, “in most of the country, the fastest broadband option is the local cable company,” says Chris Marangi, who manages the Gabelli Multimedia Trust, a closed-end fund. (Watching all those streamed flicks requires a strong Internet connection, after all.) Many cable and satellite providers offer their subscribers the ability to stream shows on demand, through programs such as HBO Go, without having to rely on Netflix or Hulu. Plus, live sports events are often left out of the Web services, although a new standalone channel from satellite provider Dish Network (DISH, $76.54) that includes ESPN suggests that that this situation is changing, too.

Here are three television stocks to watch.

Comcast

Comcast customers may not like their service, but investors have plenty of reasons for liking the stock. Comcast, already the largest cable operator in the country, wants to get much bigger. If it completes the proposed merger with Time Warner Cable (TWC), its closest competitor, Comcast will increase its subscriber base by about one-third, to 70 million households, to which it can offer the lucrative “triple play” bundle of cable, Internet and phone services. The FCC, which has been taking its time mulling over the merger, is expected to rule this year..

And if the merger fails? Analyst Greg Miller, of Canaccord Genuity, says that even without Time Warner Cable, Comcast shares deserve a premium price because of the company’s leap into content with the 2013 purchase of NBCUniversal, which added film studios and cable and broadcast networks to Comcast’s cache.

Comcast is treating its shareholders generously. Since instituting a dividend in 2008, the company has increased its payout by 260%. And if the Time Warner Cable deal closes, Comcast plans to ramp up its buyback program by $2.5 billion (on top of the $2.3 billion worth of repurchases it made in the first nine months of 2014). Analysts on average see Comcast’s earnings rising by 10%, to $3.30 per share, in 2015. The stock trades at 17 times that figure, a bit more than the overall market. Comcast returned 8% over the past year.

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Time Warner

Before Time Warner Cable was targeted by Comcast, it belonged to media conglomerate Time Warner. Time Warner has steadily shed its assets over the past few years, starting with AOL and Time Warner Cable in 2009 and Time Inc. in June. The result: a pure content provider known for CNN, Turner Broadcasting and HBO, which continues to lure in subscribers with hit shows such as the violent epic Game of Thrones. HBO, which (along with sister network Cinemax) has 127 million subscribers worldwide, will expand its reach further when it launches a standalone streaming service this year.

Time Warner made headlines last year when it rejected an $80 billion buyout offer from Rupert Murdoch’s Twenty-First Century Fox (FOXA). Time Warner’s stock fell 15% in the two days after Fox withdrew its bid. But CEO Jeff Bewkes has made clear that Time Warner can stand on its own, and analysts agree. “As the largest producer of television content, Time Warner holds a very strong position,” says Morningstar’s Macker.

Like Comcast, Time Warner is spending big on its own shares. The company repurchased nearly $5 billion worth of stock in the first ten months of 2014. Time Warner has also steadily raised its dividend, at an average annual rate of 11% over the past five years. The stock, which returned a whopping 36% over the past year, sells for 17 times estimated 2015 earnings, a reasonable figure given that analysts expect earnings growth of 13% this year. (Both Comcast and Time Warner boast 1.6% dividend yields.)

CBS

CBS owns the eponymous broadcast network and 29 local TV stations, as well as a treasure trove of content. Its original programs, including hit shows such as CSI and NCIS, generate cash from their first run to syndication to online viewing and DVDs. CBS also owns the rights to key sports events, such as Thursday night National Football League games. And the company has launched its CBS All Access streaming service, which charges customers $6 a month.

Higher programming costs and uneven ad sales put pressure on CBS’s earnings in 2014, big reasons the stock lost 1% over the past year. But CBS continues to hike its quarterly dividend—most recently by 25%, to $0.15 a share—and it bought back almost $3 billion worth of shares in the first nine months of 2014. Tuna Amobi, an analyst for S&P Capital IQ, rates CBS a “strong buy,” citing diverse streams of revenue that make the company less dependent on advertising. Analysts estimate 20% earnings growth in 2015, to $3.61 per share, and a 21% jump next year. The stock trades at 16 times this year’s estimated profits.