BofA names three dividend stocks for steady yield

Bank of America’s US equity strategy team recommends Chevron, Duke Energy and Host Hotels & Resorts as dividend stocks that meet a screen for above-average yield without the highest, cut-prone payouts. The bank’s screen targets the second quintile of Russell 1000 payers, above the index’s 1.02% average yield. Savita Subramanian, head of US equity and quantitative strategy, says dividends should matter more as payout ratios sit near record lows. The firm cautions that the S&P 500 has already surpassed its year-end target of 7,100 and that corrections near 10% occur about once a year.

Chevron posted a 3.55% dividend yield and about a 31% year-to-date share gain, supported by higher crude prices. The company reported second-quarter results on July 31 with net income of roughly $12 billion, up about 400% from a year earlier. Chevron CEO Mike Wirth described operating performance as “unusually strong.” The company has increased its payout for more than 25 consecutive years and maintains a balance sheet positioned to withstand oil-price moves. Analysts tracked by LSEG rate the stock a buy, implying roughly 8% upside to the average price target.

Duke Energy offers a defensive utility profile with a 3.59% dividend yield and modest share gains year to date. In July the utility raised its quarterly payout to $1.085, marking 100 years of uninterrupted dividend payments. Second-quarter adjusted earnings per share beat estimates while revenue fell short. Duke serves about 8.7 million customers and operates roughly 55,700 megawatts of capacity across six states, where regulated rate-base growth drives long-term cash flow. Analysts tracked by LSEG rate Duke Energy a buy, with nearly 13% upside to the average target.

Host Hotels & Resorts carries a 3.56% dividend yield and has seen about 27% share gains year to date. The luxury and upper-upscale hotel owner reported second-quarter revenue and adjusted funds from operations that beat expectations and raised full-year adjusted FFO guidance. Chief Executive James Risoleo attributed results to resilient spending by higher-income customers and steady group bookings, and pointed to an investment-grade balance sheet and a diversified portfolio. Analysts tracked by LSEG rate the REIT a buy, with roughly 11% upside to the average price target.

Bank of America’s screen excluded the highest-yielding Russell 1000 names, where dividend cuts are more common, and produced only three stocks that met its criteria: Chevron, Duke Energy and Host Hotels & Resorts. The analysts’ ratings cited by the bank show modest upside across the three picks, and the bank maintains a cautious view on broad-market exposure after strong S&P 500 gains.