Bank of America has a sweet spot for investors searching for the right dividend plays. Savita Subramanian, equity and quantitative strategist, on Tuesday released a screen for the second quintile of the Russell 1000 by trailing dividend yield. This group, she said, excludes yields of distressed companies found in the top quintile. They are also attractively valued.
Pro then sorted for the names with the highest dividend yields: Zions had the highest dividend yield of the stocks on the screen at 3.47%. The bank stock has climbed around 15% this year, putting it on track to snap a two-year losing streak. After the recovery rally this year, the average analyst polled by LSEG foresees little upside ahead. The typical analyst also has a hold rating on the stock. AES was another top yielder at 3.41%.
mountain Zions and AES, year to date But Wall Street foresees a big rebound ahead, with an average price target suggesting shares can climb around 29% over the next year, per LSEG. The majority of analysts have a buy rating. Jefferies analyst Julien Dumoulin-Smith joined the bull camp last month, initiating coverage at a buy rating. He called the play a pivot to renewable energy, while noting that it comes at a discount for investors.