Defensive stocks offer solid dividend yields. Bank of America likes these names

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The Wall Street bank called out a few buy-rated energy pipeline operators.

Data center power demand could boost companies with ties to transporting and storing natural gas, and that bodes well for a few stocks that also happen to pay attractive dividends, according to Bank of America. "In this environment, we favor gas-linked names, especially midstream ones," said analyst Jean Ann Salisbury in an Oct. 17 report. The natural gas liquids midstream space is "relatively defensive," she added.

That is different from the tax treatment for C-corporations, where the business is on the hook for corporate income taxes and shareholders pay levies on dividends received. Due to that preferential tax treatment, these partnerships can offer higher yields. Less positively, investors in these partnerships also typically receive a Schedule K-1 detailing the income they received, which can make tax-filing season complicated.

 

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