The S&P 500 has already cleared Bank of America’s year-end target of 7,100, a sign that broad index exposure carries more risk than the rally suggests; historically, a correction near 10% arrives about once a year.
Savita Subramanian, the firm’s head of US equity and quantitative strategy, sees dividends playing a bigger role in returns as payout ratios sit near record lows, a shift toward what she calls a “total return” market.
Rather than chasing the Russell 1000’s highest yields, where cuts are common, her screen targets the second quintile: payers above the index’s 1.02% average without stretching for it.
Three dividend stocks cleared that bar.
Chevron (CVX)
Chevron carries a 3.55% dividend yield, backed by a 31% year-to-date share gain as elevated crude prices persist amid ongoing Middle East tensions.
The energy major beat expectations on both revenue and earnings when it reported second-quarter results on July 31, with net income surging roughly 400% year-over-year to about $12 billion.
In a CNBC interview tied to the report, Chief Executive Mike Wirth described operating performance as unusually strong across the business.
A Dividend Aristocrat with more than 25 consecutive years of payout increases, Chevron pairs that consistency with a balance sheet built to absorb oil-price swings.
LSEG-tracked analysts rate the stock a buy, with roughly 8% upside to the average price target.
Duke Energy (DUK)
Duke Energy offers a more traditional defensive profile: a 3.59% dividend yield on shares up roughly 3% year-to-date.
The utility raised its quarterly payout to $1.085 a share in July, marking a full century of uninterrupted dividend payments.
Second-quarter results were mixed, with adjusted earnings per share beating estimates even as revenue fell short.
That unevenness matters less for a regulated utility serving 8.7 million customers and operating 55,700 megawatts of capacity across six states, where rate-base growth typically carries more weight than any single quarter’s top line.
LSEG-tracked analysts rate the stock a buy, with nearly 13% upside to the average price target.
Host Hotels & Resorts (HST)
Host Hotels & Resorts rounds out the list with a 3.56% dividend yield, the clearest example here of how specialized real estate can hold up in a resilient consumer environment.
Shares of the luxury and upper-upscale hotel owner have gained about 27% year-to-date after second-quarter revenue and adjusted funds from operations both beat expectations, prompting management to raise full-year adjusted FFO guidance.
Chief Executive James Risoleo credited resilient travel spending among affluent customers and steady group bookings, pointing to the REIT’s investment-grade balance sheet and diversified portfolio as support for growth ahead.
LSEG-tracked analysts rate HST a buy – with roughly 11% upside to the average price target.
All in all, BofA recommends Chevron, Duke Energy, and Host Hotels & Resorts for investors seeking above-average yield without reaching into high-risk payout territory.
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