As the painful first half of 2022 comes to an end, many income investors are hoping for some kind of relief. Many dividend-paying stocks have seen their yields rise slightly in recent months as their stock prices have slowly declined.

For income investors, the current environment has been quite hostile to pullback buyers.

We’ve had a few short-lived bear market rallies this year. Many more will certainly follow.

Although the likelihood of a V-shaped recovery diminishes with each rapid decline, there are still plenty of oversold stocks lagging for a relief bounce.

In this article, we’ll use the comparison tool TipRanks to evaluate three dividend-paying stocks that Wall Street still considers “strong buys.”

Broadcom (AVGO)

Broadcom stock is a designer and developer of semiconductors and related software. The fall in chip stocks has been brutal for the $198 billion companies, which are now down 28% from their 2021 highs.

The company recently agreed to acquire virtualization software company VMWare, in a deal worth $61 billion. Such a deal bolsters Broadcom’s software presence, and given the timing of the deal (after a major drop in tech stocks), there’s a good chance Broadcom will walk away with a good deal. Add potential synergies to the equation, and the VMWare deal should be applauded by investors.

Despite Broadcom’s diversification into software via M&A, the company is still subject to the vagaries of semi-space. While chip demand remains incredibly robust to this day, it’s unclear what a severe recession could mean for the chipmaker.

On the one hand, the demand for network chips seems to be on the rise, thanks in part to the resilience of the company, which is always more than willing to invest in the digital transformation trend. On the other hand, it is difficult to assess where demand will be at the end of the year if further evidence of an economic slowdown materializes.

If demand declines rapidly, any acceleration of the supply chain in response to semi-shortage could lead to reductions down the road. For many quarters, demand for chips has been high, but supply is limited. Once the supply is restored, it is not known where the demand will be. For Broadcom, this is a major short-term risk.

Anyway, I’m a fan of Broadcom’s latest acquisition. This demonstrates that management is disciplined about the prices they will pay. At the time of writing, AVGO shares are trading at 6.7 times sales and 24.3 times trailing earnings. With a dividend yield of 3.34%, Broadcom looks like an excellent value.

Wall Street agrees, with an average Broadcom price target of $700.58, implying a 42.86% upside.

Shell is an oil supermajor that has finally slipped into a correction after racing with energy bulls for more than a year. Shell is a UK company with a simplified share structure and a juicy 3.7% yield following the latest pullback.

With oil prices soaring again, it’s hard to count the energy giant as it seeks to make the most of its oil and gas windfall. In the long term, Shell is ready to move to renewables, with an energy-as-a-service model that responds to the times.

Indeed, renewable energy is the future, and Shell wants to be relevant in such a future. In the meantime, everything revolves around upstream and marketing, still strongly influenced by the price of oil. With upstream production slowly slowing down over the years, Shell may not be the ideal fit for playing a “higher for longer” type of environment.

Either way, the LNG (liquefied natural gas) business is a great transition energy that can help Shell slowly reduce its carbon emissions over decades. With a low beta of 0.7 and a modest earnings multiple of 9.4 times, Shell is a great stock to hedge your bets.

Wall Street is a big fan, with an average Shell price target of $68.43 implying a 30.1% upside.

Hasbro (HAS)

Hasbro is a toy company that has slipped around 33% from its highs. The stock never recovered to its pre-pandemic highs. Now that we are talking about a recession, the stock has fallen again. While Hasbro is unlikely to reverse those 2020 lows, it looks like a consumer slump could weigh heavily on holiday demand. For such a seasonal stock, recent macro headwinds are not encouraging.

Still, analysts are optimistic, with a “Strong Buy” rating. The stock is weathering the recent wave of supply chain disruptions quite well. Just because supply is on the right track doesn’t mean demand will stay strong through the end of the year. Moreover, a continuation of the headwinds of COVID could also weigh heavily.

While digital games and other technologies can drive spending away from toys, I think there’s no reason physical toys and games can’t co-exist. They’ve been doing it for years, after all.

For now, the mainstay of retail is a low-cost income game. At the time of writing, the stock is trading at 1.8 times sales and 28.2 times earnings, with a dividend yield of 3.34%.

On Wall Street, analysts are bullish, with Hasbro’s average price target of $109 implying a 29.93% upside.

Conclusion

Many analysts have recently lowered the bar for price targets and stock ratings. The following three names have retained their “Strong Buy” status and are great long-term plays for yield hunters.

Wall Street expects the most from Broadcom of the three names in this coin, with more than 40% upside for the coming year.

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