HomeTrading TipsJPMorgan Recommends Defensive Equities

JPMorgan Recommends Defensive Equities

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JPMorgan (NYSE:JPM)

Markets have been rising in recent sessions, and year-to-date losses have decreased.

Elyse Ausenbaugh, a global investment strategist at JPMorgan (NYSE:JPM), summarizes current conditions as follows: “The Fed is still talking tough on inflation, bond yields remain at or near cycle highs, and the world’s other major economies continue to face profound risks.” However, investors don’t seem to have the same sense of “impending doom” they did a few months ago.

Here Are 2 High-Yield Dividend Names by JPMORGAN

JPM’s stock experts are recommending conservative firms to preserve clients’ portfolios. Their defence: high-yield dividend payers, a classic yet successful strategy. The analyst says, “As custodians of capital, it encourages us to concentrate on greater conservative tilts over the next year in our core portfolios.

AT&T (NYSE:T)

Its blue logo is among the most recognized logos in the world.

AT&T’s 2017 revenue was $168.9 billion. First-half revenue of $67.7 billion is down from $88 billion in 1H21. The company’s most recent quarterly report, for 2Q22, revealed the lowest top line in many years, at $29.6 billion, but profitability was consistent. Free cash flow declined from $5.2 billion to $1.4 billion year over year.

Despite this, AT&T has maintained its quarterly dividends. The corporation has an exceptional record of stability; although it has adjusted the dividend to assure payment, it has never missed a quarterly payment since 1984. The latest payout, 27.75 cents per share, was announced at the end of June and paid on August 1. This yields 6.5% on $1.11 annually. The yield is three times the S&P average and provides some inflation protection.

Phillip Cusick of JPMorgan views T as a good defensive stock.

Mobility continues to gain postpaid phone additions and ARPU. Price hikes and roaming income could boost 2H22 service revenue growth, offsetting the 3G shutdown and CAF-II revenue losses. Service revenue growth, cost reductions, and sustained promotional expenditure should increase 2H22 margins. Cusick said that AT &T is a defensive company.

Cusick assesses AT&T shares as Overweight (Buy) and sets a $23 price objective to predict a 32% 12-month return.

Analysts recommend buying AT&T stock. The stock’s $17.38 price and $22.59 objective imply a 30% rise next year.

OMNICOM (NYSE:OMC)

AT&T proved that contemporary businesses need good branding. Omnicom Group provides branding, marketing, and corporate communications solutions to 5,000 business customers in 70 countries. Omnicom (NYSE:OMC) earned $2.2 billion last year on $14 billion in sales.

Two quarters into 2022, it seems Omnicom will replicate last year’s results. 1H22 sales were $7 billion, and diluted EPS was $3.07. Despite economic difficulties this year, the corporation reported strong earnings.

Omnicom paid a 70-cent dividend in July. Payday is October 12. Annualized, it yields 4%. Omnicom has made every scheduled payment since 1989.

JPMorgan’s David Karnovsky wrote in his evaluation of this stock, “The quarter’s results confirm our view that agencies are operating in a fundamentally healthier market post-pandemic, which could help mitigate some of the economic downturns ahead.”

Featured Image-  Megapixl @Lewistse

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