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As we progress through December and round out what has been a magnificent year for the stock market there appears to be more opportunity ahead.

Notably, several top-rated Zacks stocks are standing out as they appear to be poised for more upside while offering dividend yields over 5% as well. Considering this scenario here is a look at three of these intriguing stocks that are shaping up to be nice income options in the portfolio.

The Williams Companies (WMB)

Among the Zacks Oils and Energy sector, The Williams Companies stock looks very compelling at the moment and boasts a Zacks Rank #1 (Strong Buy).

Only 7% from its 52-week highs of just over $37 a share seen earlier in the month, the recent pullback in Williams stock appears to be a buying opportunity. Although natural gas prices have remained lower in 2023, Williams is one of the largest domestic transporters of the commodity and a premier energy infrastructure provider in North America.

Over the last 60 days, annual earnings estimates for fiscal 2023 are now up 8% from $1.93 a share to $2.09 per share. Plus, FY24 EPS estimates are up 8% as well and Williams’ stock trades at a reasonable 16.6X forward earnings multiple which is slightly below its industry average and the S&P 500’s 21.6X. Add in a 5.13% annual dividend yield at the moment, and owning Williams’ stock makes a lot of sense right now as any rebound in natural gas prices would only brighten the picture.

Image Source: Zacks Investment Research

3M (MMM)

One multi-sector conglomerate that looks attractive right now is 3M which currently sports a Zacks Rank #2 (Buy). As a diversified technology company, 3M is a global manufacturer of electronics, industrial, home improvement, and transportation products along with health information systems and other medical solutions.

3M’s bottom line remains robust as annual earnings are projected to dip -10% this year but rebound and rise 9% in FY24 to $9.92 per share. Furthermore, 3M’s stock trades at 11.3X forward earnings with earnings estimates for FY23 and FY24 remaining higher over the last 60 days making its P/E valuation more attractive. The cherry on top is 3M’s 5.82% annual dividend yield with the company raising its payout for over 60 years classifying it as a dividend aristocrat (25 consecutive years) and a dividend king (50 consecutive years).

Image Source: Zacks Investment Research

Rio Tinto (RIO)

Out of the Basic Materials sector, Rio Tinto is an international mining company that investors will want to consider with its stock sporting a Zacks Rank #2 (Buy). Rio Tinto has diverse interests in mining for a multitude of commodities including aluminum, copper, and gold with operations in New Zealand, Australia, South Africa, Europe, and Canada.  

With a 5.11% annual dividend yield Rio Tinto’s annual earnings are forecasted to dip -11% in FY23 but rebound and climb 15% in FY24 to $8.38 per share. More intriguing, FY23 earnings estimates have risen 4% in the last 30 days while FY24 EPS estimates have soared 18% with it being noteworthy that Rio Tinto’s stock trades at just 9.3X forward earnings.

Image Source: Zacks Investment Research

Bottom Line

Considering their lofty dividends and reasonable valuations, rising earnings estimates make The Williams Companies, 3M, and Rio Tinto’s stock very attractive. This combination is certainly reassuring to investors making now an ideal time to buy.

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