Core Viewpoint - Investors are presented with attractive income stock opportunities in 2025, particularly in light of high inflation and interest rates affecting financial results and share prices of leading consumer brands, resulting in increased dividend yields for several top companies [1]. Group 1: Target (TGT) - Target is considered a strong buy despite declining sales, attributed to its low price and high dividend yield, making it an opportune time for investment [4][9]. - The company has faced significant challenges, with its stock down 62% from its highs, and sales decreased by 2.8% year-over-year in the first quarter of fiscal 2025, with comparable sales down 3.8% [5]. - Target is making progress in cost management, with operating income up 19% year-over-year, and digital sales showing a 4.7% increase, alongside a 35% rise in same-day delivery sales [6]. - The management has initiated an enterprise acceleration office to enhance technology and data utilization, aiming to improve operational agility, similar to strategies employed prior to the pandemic [7]. - Target has a strong dividend history, being a Dividend King with 54 consecutive years of dividend increases, currently yielding 4.4% [8]. Group 2: Starbucks (SBUX) - Starbucks is noted for its attractive dividend yield of 2.6%, despite underperforming the market and maintaining a share price similar to 2019 [11]. - The company has experienced a decline in sales, but comparable-store sales are stabilizing, with only a 1% decrease year-over-year in the second quarter of fiscal 2024 [12]. - New CEO Brian Niccol is focusing on customer-centric strategies to revitalize the brand and enhance customer engagement in stores [13]. - Starbucks has a strong global presence, which supports consistent financial results and dividend payments, with dividends increasing from $1.44 in fiscal 2019 to a projected $2.44 in fiscal 2025 [14][15]. Group 3: Philip Morris International (PM) - Philip Morris International is positioned for long-term growth, particularly with its focus on next-generation smoke-free products, which now account for over 40% of its revenue [18][20]. - The company reported a 10.2% increase in organic revenue to $9.3 billion in the first quarter, with smoke-free product revenue growing by 20.4% [21]. - Adjusted earnings per share rose 17% to $1.76, and the company offers a dividend yield of 3%, with a strong history of dividend increases [22].

Core Viewpoint - Jami Dimon, CEO of JPMorgan Chase, warns of a potential "cracking" in the bond market due to excessive deficit spending and high debt levels, with the 10-year yield at levels not seen since 2007 [1] Group 1: Companies Resilient to Bond Market Cracking - Philip Morris International is well-positioned to thrive regardless of bond market conditions, primarily due to its international market focus and recession-proof tobacco products [4][5] - The next-gen products, including Zyn and IQOS, now account for over 40% of Philip Morris's revenue and gross profit, indicating growth potential despite a mature market [6] Group 2: AutoZone's Performance in Weak Economies - AutoZone demonstrates resilience in recessionary environments, benefiting from consumers opting for repairs over new car purchases [7] - The company's hub-and-spoke store model enhances its market performance by ensuring all stores are well-stocked, supporting its ability to thrive if bond markets weaken [8] Group 3: Dollar General's Economic Resilience - Dollar General is positioned to perform well during economic downturns as consumers tend to "trade down" to more affordable shopping options [9][10] - The company has a strong track record of success during past recessions, with a revenue model focused on consumer staples and a vast network of over 20,000 stores [11]