Top 5 Income-Generating Stocks to Invest in for a Profitable Second Half

Investors often seek stability in companies that pay regular dividends, especially during uncertain times in the stock market. These companies can provide a reliable income stream, helping to cushion against volatility.

Recent market fluctuations were sparked by concerns over the conflict between Israel and Iran. While stocks dipped early last week, they managed to close slightly higher after the Federal Reserve decided to keep interest rates steady during their June meeting. However, with recent U.S. military actions in Iran, more volatility may be on the horizon.

Not all dividend payers are equal. To find stocks that might do well in the latter half of the year, CNBC Pro looked at companies in the ProShares S&P 500 Dividend Aristocrats ETF. They focused on those rated “buy” by at least 51% of analysts, with a price target that suggests at least a 10% upside. These stocks also needed a dividend yield of 1.5% or more.

One strong candidate is AbbVie, which has a dividend yield of 3.5% and a potential 15% upside based on analyst targets. This drugmaker recently announced that its cancer treatment failed to improve survival rates in a late-stage trial. However, it also reported that its migraine drug, Qulipta, outperformed a commonly used generic treatment. Despite facing challenges with its blockbuster drug Humira, AbbVie is investing over $10 billion into U.S. manufacturing, including the construction of four new plants.

Another noteworthy company is Coca-Cola, boasting a dividend yield of 2.9% and a 14% potential price increase according to analysts. The soft drink giant exceeded quarterly earnings expectations in April and reaffirmed its full-year outlook, although higher tariffs may cause some bumps along the way. CEO James Quincey acknowledged that consumer sentiment is changing but noted that spending remains strong.

Lowe’s is also on the list of companies with robust dividends. It has a 2.3% yield and a promising 25% upside predicted by analysts. Despite losing 14% year-to-date, the home improvement retailer is sticking to its full-year forecast, backed by investments in its stores, customer service, and technology.

In these times of economic uncertainty, dividend-paying stocks can be a smart choice for investors looking for stability and income.

For further insights on market trends, you can check out a detailed report from the Financial Times.

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