in our free newsletter.

Thousands benefit from our email every week.

Healthy dividend stocks have the potential to:

  • Offer a plump income stream in both good times and bad times.
  • Provide much-needed diversification to growth-oriented portfolios.
  • Outperform the S&P 500 over the long haul.

Let’s take a look at three dividend stocks that Wall Street giant Morgan Stanley sees substantial upside in.

Microsoft Corporation (MSFT)

Tech stocks aren’t exactly known for their dividends. But the ones with massive recurring cash flows and healthy balance sheets can still deliver solid cash payouts to shareholders.

Take Microsoft, for instance.

When the tech giant first started paying quarterly dividends in 2004, it was paying investors 8 cents per share. Today, Microsoft’s quarterly dividend rate stands at 62 cents per share, marking a total payout increase of 675%.

The stock currently offers a dividend yield of only 0.9%. But given Microsoft’s highly reliable dividend growth — management has raised the payout for 12 straight years — it remains an attractive choice for total return seekers.

Morgan Stanley recently reiterated an overweight rating on Microsoft. The investment bank's price target of $372 represents about 28% worth of upside from where the stock sits today.

Fine wine is a sweet comfort in any situation — and now it can make your investment portfolio a little more comfortable, too. Now a platform called Vinovest helps everyday buyers invest in fine wines — no sommelier certification required.

Invest Now

Procter & Gamble (PG)

Procter & Gamble belongs to a group of companies often referred to as the Dividend Kings: publicly traded businesses with at least 50 consecutive years of dividend increases.

In fact, P&G makes the list with ease.

In April, the board of directors announced a 5% increase to the quarterly payout, marking the company’s 66th consecutive annual dividend hike.

It’s not hard to see why the company is able to maintain such a streak.

P&G is a consumer staples giant with a portfolio of trusted brands like Bounty paper towels, Crest toothpaste, Gillette razor blades, and Tide detergent. These are products that households buy on a regular basis, regardless of what the economy is doing.

Thanks to the recession-proof nature of P&G’s business, it can deliver reliable dividends through thick and thin.

In January, Morgan Stanley raised its price target on the shares from $161 to $177, representing about 9% worth of upside from current levels.

The stock offers a dividend yield of 2.3%.

MPLX (MPLX)

MPLX isn’t a household name like Microsoft or P&G. But for the serious yield-hunters, it’s a stock that probably shouldn’t be ignored.

Headquartered in Findlay, Ohio, MPLX is a master limited partnership created by Marathon Petroleum to own, operate, develop and acquire midstream energy infrastructure assets.

The partnership pays quarterly cash distributions of 70.50 cents per unit. With the stock trading just under $33, that translates into a chunky annual dividend yield of 8.7%.

While Morgan Stanley only has as an equal weight rating on MPLX, it raised its price target from $37 to $39 recently, about 19% worth of upside from where the stock currently trades.

Sign up for our MoneyWise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.

Fine wine is a sweet comfort in any situation — and now it can make your investment portfolio a little more comfortable, too. Now a platform called Vinovest helps everyday buyers invest in fine wines — no sommelier certification required.

Invest Now

More from MoneyWise

Get a piece of commercial real estate

Enhance your portfolio with high-return commercial real estate

First National Realty Partners is the #1 option for accredited investors seeking superior risk-adjusted returns in the grocery-anchored necessity-based retail space.

While commercial real estate has always been reserved for a few elite investors, outperforming the S&P 500 over a 25-year period, First National Realty Partners allows you to access institutional-quality commercial real estate investments — without the leg work of finding deals yourself.

Invest with First National Realty Partners now.

What to Read Next

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.