ET - Morgan Stanley's top picks for high dividend-paying industries

2023-09-27 16:04:37 ET

Morgan Stanley in its 2023 Dividend Playbook on Wednesday selected its top stock picks for high dividend-paying industries, chosen by its bottom-up analysts.

These are stocks that combine yield, growth, and stability measures and look attractive on a three to five-year basis from a dividend yield perspective.

The top three picks were selected by MS analyst David Arcaro (all overweight): DTE Energy ( DTE ), with a 2024 dividend yield of 3.8%; Exelon Corp. ( EXC ), with a 2024 dividend yield of 3.7%; and Nextera Energy Inc. ( NEE ), with a 2024 dividend yield of 3%.

Followed by Verizon Communications Inc. ( VZ ), picked by Simon Flannery, and yielding a dividend of 8%; M&T Bank Corp. ( MTB ), picked by Manan Gosalia, and yielding 4.3%; and Regions Financial Corp. ( RF ), yielding 5.6%.

Other picks include ( ET ), ( MPLX ), ( EPD ), ( O ), ( ADC ), ( GLPI ), ( SPG ), ( PM ), ( MDLZ ), ( UDR ), ( INVH ), ( XOM ), ( HES ), ( LNG ), ( CL ), ( CHD ), and ( PG ).

Similarly, the brokerage published forecasts for systematic top dividend picks “to own” by running a quantitative screen that optimized total returns and risk-rewards among dividend paying stocks.

The top picks are Royalty Pharma Plc ( RPRX ), with a total expected return of 85%; AES Cop. ( AES ), with a total expected return of 74%; Crown Castle Corp. ( CCI ), with a total expected return of 61%; and L3Harris Technologies Inc. ( LHX ), with a total expected return of 59%.

In the same context, the top picks “to avoid” are Vornado Realty Trust ( VNO ), with a total expected return of -48%; United Parcel Service ( UPS ), with a total expected return of -33%; Sonic Automotive Inc. ( SAH ), with a total expected return of -30%; and C.H. Robinson Worldwide Inc. ( CHRW ), with a total expected return of -26%.

More on yield dividends:

• My Top 10 High Yield Dividend Stocks For September 2023
• Better High Yield Buy: Enbridge Stock Or Kinder Morgan Stock
• 3 Amazing 7+% Yielding Dividend Aristocrat Buys
• Verizon: 8% Yield, Dividend Is Not At Risk

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