JPMorgan Calls Correction “Healthy” – 5 Safe High-Yield Dividend Stocks
Jamie Dimon is one of the most influential figures in the world of banking. Alongside other financial titans like Warren Buffett and David Solomon, his words carry significant weight. Recently, the CEO of JPMorgan highlighted that the current three-year bull market is unmistakable, but he also warned that asset prices are currently high and credit spreads are unusually tight — a combination that suggests overconfidence. Like many who have issued warnings, Mr. Dimon predicts a potential market correction within the next 6 months to 2 years. He points to factors such as excessive government spending, geopolitical tensions, and rising global militarization as possible triggers. With the market hitting record highs and artificial intelligence spending reaching staggering levels, one thing is clear: a correction is not a matter of if, but when.
Key Points from 24/7 Wall St.
- The stock market has risen nearly 30% since the lows seen in early April and may need a period of consolidation.
- The S&P 500 currently trades at a valuation of 30.88, significantly higher than its average over the past five years.
- JPMorgan’s recommended stocks are likely to perform better during a correction compared to high PE and no PE technology or AI stocks.
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JPMorgan’s Perspective
This week, JPMorgan analysts suggested that a retreat from today’s elevated stock prices could actually be beneficial. It might help cool an overheated market and create conditions for steadier, longer-term growth. Their view comes as key benchmarks like the S&P 500 trade at high valuations after months of consistent gains. To support this, we reviewed the JPMorgan equity research database to identify companies that are stable, pay reliable dividends, and operate in sectors that tend to perform well during market corrections, such as healthcare, utilities, and consumer staples.
Why JPMorgan’s Stocks Are Recommended
JPMorgan is recognized as a leader in the investment landscape, both on Wall Street and globally. Its top-tier research department continues to provide institutional and high-net-worth clients with the best investment ideas across various sectors, and this trend is expected to continue for years.
AT&T
AT&T is the fourth-largest telecommunications company by revenue worldwide. The legacy telecom company has been undergoing a long restructuring process while maintaining a solid dividend of 4.24%. Seventeen analysts have given the stock a “Buy” rating, showing strong support from Wall Street. AT&T Inc. (NYSE: T) provides a range of telecommunications, media, and technology services globally. Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- SecuT
- Cloud solutions
- Outsourcing
- Managed and professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.
Additionally, this segment provides residential customers with broadband fiber and legacy telephony voice communication services.
It markets its communications services and products under:
- AT&T
- Cricket
- AT&T PREPAID
- AT&T Fiber
The company’s Latin America segment provides wireless services in Mexico and video services throughout the region. This segment markets its services and products under the AT&T and Unefon brands.
JPMorgan has a price target of $33 for the stock.
Energy Transfer
Energy Transfer is one of North America’s largest and most diversified midstream energy companies, offering a solid 7.82% dividend. As a top master limited partnership, it is a safe option for investors seeking energy exposure and income, as the company pays a substantial distribution. Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation
- Various acquisition and marketing assets
Following the acquisition of Enable Partners in December 2021, Energy Transfer owns and operates over 114,000 miles of pipelines and related assets in 41 states, spanning all major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, L.P., formerly known as Energy Transfer Partners, L.P., the company also owns Lake Charles LNG Company, the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco LP (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners, LP (NYSE: USAC).
JPMorgan has a price target of $22 for the stock.
Entergy
Entergy Corporation is an energy company engaged primarily in electric power production and retail distribution operations in the Deep South of the United States. This top utility stock is always a sensible choice for conservative investors, paying a 2.48% dividend. Together with its subsidiaries, Entergy Corporation (NYSE: ETR) produces and distributes electricity in the United States.
It operates in two segments:
- Utility
- Entergy Wholesale Commodities
The Utility segment generates, transmits, distributes, and sells electric power in portions of:
- Arkansas
- Louisiana
- Mississippi
- Texas
- City of New Orleans
The company also distributes natural gas.
The Entergy Wholesale Commodities segment is involved in:
- The ownership, operation, and decommissioning of nuclear power plants located in the northern United States
- Sale of electric power to wholesale customers
- Provision of services to other nuclear power plant owners
- Ownership of interests in non-nuclear power plants that sell electric power to wholesale customers
The company generates electricity from various sources, including gas, nuclear, coal, hydro, and solar. It sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies.
Its power plants have approximately 24,000 megawatts (MW) of electric generating capacity, which includes 5,000 MW of nuclear power.
The company delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
JPMorgan has a price target of $113 for the shares.
Merck
Merck develops and produces medicines, vaccines, biological therapies, and animal health products. Merck & Co. Inc. (NYSE: MRK) is not just a healthcare company but a global force in the industry. This healthcare giant has seen a decline of over 30% in the last year while paying a solid 3.77% dividend. The company operates through two segments:
- Pharmaceutical
- Animal Health
The Pharmaceutical segment offers human health pharmaceutical products in:
- Oncology
- Hospital acute care
- Immunology
- Neuroscience
- Virology
- Cardiovascular
- Diabetes
- Vaccine products, such as preventive pediatric, adolescent, and adult vaccines
The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, health management solutions and services, as well as digitally connected identification, traceability, and monitoring products.
Merck serves:
- Drug wholesalers
- Retailers
- Hospitals
- Government agencies
- Managed healthcare providers, such as health maintenance organizations
- Pharmacy benefit managers and other institutions
- Physicians
- Physician distributors
- Veterinarians
- Animal producers
Merck’s growth is a result of its efforts and strategic collaborations. The company works with AstraZeneca PLC (NYSE: AZN), Bayer AG, Eisai Co., Ltd., Ridgeback Biotherapeutics, and Gilead Sciences, Inc. (NASDAQ: GILD) to jointly develop and commercialize long-acting treatments for HIV, demonstrating a commitment to innovation and growth.
JPMorgan has a target price objective of $120 for the stock.
Mondelez
This consumer staples giant is always a safe idea when the going gets tough, especially with a 3.05% dividend. Mondelez International, Inc. (NASDAQ: MDLZ) is a snack company. The company’s core business is the manufacture and sale of chocolate, biscuits, and baked snacks.
The Company also has additional businesses in adjacent, locally relevant categories, including:
- Gum and candy
- Cheese
- Grocery
- Powdered beverages
Its portfolio includes global and local brands such as Oreo, Ritz, LU, Clif Bar, and Tate’s Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka, and Toblerone chocolate.
Mondelez International segments include Latin America, AMEA, Europe, and North America. It sells its products in over 150 countries and operates in approximately 80 countries, with 147 principal manufacturing and processing facilities across 46 countries.
The company sells its products to:
- Supermarket chains
- Wholesalers
- Supercenters
- Club stores
- Mass merchandisers
- Distributors
- Convenience stores
- Gasoline stations
- Drug stores
- Value stores
- Retail food outlets
JPMorgan has set a price target of $74 for the stock.
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