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5 Top-Ranked S&P Stocks for Income and Growth Investors

Priti Dhanuka

Amid uncertain economic-operating backdrop, investors are apprehensive while taking decisions. Despite continued domestic economic growth, sturdy equity markets and increasing corporate earnings owing to tax reforms, the Fed’s accommodative-monetary policy, Brexit-related political and economic concerns, tensions arising from the unsolved U.S.-China trade deal negotiations, the U.S. government shutdown and expectation of a global economic slowdown have hampered economic activities since the beginning of the year.

Nonetheless, given the impressive financial performance in the second quarter, along with a healthy consumer-spending environment, the time is apt for investors to make profitable investment decisions.

Around 95% of the S&P 500 companies, reported so far, exhibited decent results for the June-end quarter. While earnings suggested a lackluster show, the revenue performance displayed a favorable momentum marching ahead. Further, the S&P 500 Index returned merely 4.3% in the quarter, leading investors to venture into the domain of growth stocks.

However, amid several domestic and international happenings, it may be a cliché, so sticking to the old-school style of investing in stocks that provide steady income in the form of regular dividends, along with a solid growth potential, would be wiser. While betting on undervalued stocks could be appropriate in this scenario, one may end up falling in a value trap if the low-price multiples are justified with weak fundamentals.

Therefore, we have selected stocks with a favorable Zacks Rank, indicating that these have been witnessing positive estimate revisions, which generally translate into rapid price appreciation. Following this strategy can help investors reap profits despite the prevalent ambiguity of the situation.

Moreover, regular dividend-paying stocks always attract more investors as these act as a steady source of income. Most of the time, cash dividends return more than what can be earned from deposits in savings accounts.

Hence, while selecting stocks, investors should focus on the dividend yield (annual dividend per share/stock’s price per share) together with growth potential, which is reflected by the price rally.

5 S&P Stocks to Bet On

With the help of our Zacks Stock Screener, we have shortlisted five stocks which carry a Zacks Rank #1 (Strong Buy) or #2 (Buy), have outperformed the S&P 500, year to date and pay dividend that yields more than 1.50%.

Further, these stocks have a VGM Score of ‘A’ or ‘B’. Using our new style score system, the VGM Score rates each stock on the combined weighted styles, helping identify the ones with the most attractive value, highest growth, and most promising momentum, across the board. The combination of all three styles that goes into the VGM Score makes it one of the most comprehensive and best performing indicators to use with the Zacks Rank.

Des Moines-based Principal Financial Group, Inc. PFG is a global provider of retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients.

Zacks Rank: #2
VGM Score: A
Price Gain YTD: 20.5%
Dividend Yield: 4.06%

Minneapolis-based Ameriprise Financial, Inc. AMP is a provider of various financial products and services to individual and institutional clients in the United States and worldwide.

Zacks Rank: #2
VGM Score: B
Price Gain YTD: 23.6%
Dividend Yield: 3.01%

Northbrook-based The Allstate Corporation ALL provides property and casualty, and other insurance products in the United States and Canada.

Zacks Rank: #2
VGM Score: A
Price Gain YTD: 23.9%
Dividend Yield: 1.95%

Minneapolis-based Target Corporation TGT operates as a general merchandise retailer in the United States.

Zacks Rank: #2
VGM Score: A
Price Gain YTD: 62%
Dividend Yield: 2.47%

Minneapolis-based General Mills, Inc. GIS is a manufacturer and markets branded consumer foods globally.

Zacks Rank: #2
VGM Score: B
Price Gain YTD: 38.2%
Dividend Yield: 3.64%

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Now that 8 states have fully-legalized it (with several more states following close behind), Zacks has identified 5 stocks that could soar in response to the powerful demand. One industry insider described the future as “mind-blowing” – and early investors can still get in ahead of the surge.

See these 5 “sin stocks” now >>

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Ameriprise Financial, Inc. (AMP) : Free Stock Analysis Report
Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
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