Wall Street's Top Income Stock Pick for June 2024

As the Fed is expected to start cutting interest rates in September, Wall Street analysts predict that 2024 will be the year of income stocks. According to Bank of America analysts, households tend to divest from money market funds and invest in dividend stocks when interest rates fall below 5%. With the current Fed fund rate at 5.5% and experts predicting at least three rate cuts this year, the best dividend stocks are trading at their lowest, offering an opportunity to buy at a discount.

Recent ratings from Wall Street analysts imply an upside of nearly 20% for International Business Machines IBM, one of the best-rated income stocks. The stock offers an impressive annual dividend yield of 4.04%, well above the industry average of 1.13%.

IBM can comfortably sustain its dividends, given its free cash flow (FCF) payout ratio of 48%. A low FCF payout ratio indicates that the company has sufficient cash to pay its shareholders and reinvest for growth. IBM is a dividend aristocrat with a solid 35-year history of consistent and increasing dividends. The stock has paid dividend yields above 3% since 2015, with a reasonable annual dividend growth rate of 5.7%.

The company’s balance sheet is strong enough to support growth and dividend payments. IBM’s strong business model and investment in AI have a high potential for boosting its growth. 

Looking For Higher-Yield Opportunities?

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For instance, Basecamp Alpine Notes offers a target APY of 9% with a term of only three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and funding obligations with no missed or late interest payments. With a low minimum investment of just $1,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio. 

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings. 

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