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3 stocks with large dividends at more than 7%; Raymond James says ‘Buy’
Wall Street investment firms are burning midnight oil as the end of 2020 approaches, releasing their year-end ratings and New Year’s forecast, both for investor edification. There is one obvious point: we are in a period of rising markets, and investor sentiment is rising to its highest now that the elections are settled and COVID vaccines are urgently approved and entering distribution networks, but lockdown policies put in place to tackle the virus this winter are slowing economic recovery. It remains to be seen whether the economy will really change or not. In the meantime, Raymond James strategist Tavis McCourt has released his take on the current situation and his comments are worth considering. First, McCourt notes that investors are focused on the good news: “[The] The stock market is more focused on deploying vaccines and fully reopening economies in 2021, and so far the negative data points have been widely dismissed. Looking ahead, McCourt writes over the next two years: “We think the logical outcome of 2021 (and 2022 for that matter) is a likely ‘return to normal’ with strong EPS growth offset by lower earnings. P / E unless there is a change in vaccine history. We expect cyclical sectors and smaller cap stocks to continue to outperform, as is typically the case in early cycle markets… ”Raymond James research analysts scouted the markets for the“ right ”buys , and their choices deserve a closer look. The TipRanks database sheds additional light on three of JMP’s picks – stocks with dividends paying 7% or more – and which the investment firm sees as a 10% rise or New Residential Investment (NRZ) segment Real estate investment trusts (REITs) have long been known for their high and reliable dividends, a feature promoted by tax regulations which state that these companies must return a certain proportion of their profits directly to investors. New York-based New Residential Investment is typical of its industry. The company’s portfolio includes residential mortgages, mortgage servicing rights and mortgages. NRZ focuses its operations on the residential housing sector. NRZ is a mid-sized company, with a market value of $ 4.13 billion and a portfolio of $ 5.72 billion. The company’s revenue has been increasing since the second quarter of 2020, after large losses during the first quarter “ corona recession. ” Third-quarter earnings, however, were 19 cents per share, down from 54 cents in the last year’s quarter. But even with this loss, NRZ was careful to maintain the dividend. In fact, she did more than that. The company raised the third quarter dividend to 15 cents per common share, continuing an interesting story. In the first quarter, the company reduced the dividend on common stocks to 5 cents, in an effort to preserve capital during the corona crisis. The company has since increased the dividend by 5 cents in each subsequent quarter, and the fourth quarter payout, announced in mid-December, is 20 cents per common share. At that rate, the dividend annualized to 80 cents and the yield exceeds 7.87%. In addition to increasing the dividend, NRZ also announced a share buyback program totaling $ 100 million. The buyback is for preferred shares and goes hand in hand with the existing common share buyback policy. Analyst Stephen Laws, in his NRZ coverage for Raymond James, writes: “We expect strong origins volumes and an attractive gain on selling margins to lead eventually, and we continue to expect an increase in the dividend in 4Q […] For 4Q20, we are increasing our estimate of basic earnings from $ 0.02 per share to $ 0.35 per share. For 2021, we’re increasing our estimate of basic earnings from $ 0.08 per share to $ 1.31 per share. According to these comments, Laws attributes the stock to outperform (i.e., buy). Its target price of $ 11.50 implies a 16% year-over-year increase. (To see the track record of Laws, click here) It is not often that analysts all agree on a stock, so when this does happen, take note. NRZ’s Strong Buy consensus rating is based on a unanimity of 8 buys. The stock price of $ 11.36 The price target suggests a 14% and a change from the current stock price of $ 9.93. (See NRZ stock market analysis on TipRanks) Fidus Investment Corporation (FDUS The next step is a business development company, Fidus Investment. This company is one of many mid-sized business finance niches, providing debt solutions and access to capital to small businesses that may not be able to obtain loans in larger markets. Fidus focuses on senior secured debt and mezzanine debt for companies valued between $ 10 million and $ 150 million. Fidus inves in 68 companies with a total value of $ 697 million. The largest part of this portfolio, 59%, is made up of senior debt, the remainder being mainly divided between subordinated debt, senior debt and equity linked securities. The company saw its revenue increase in the second and third quarters of 2020, after negative results in the first quarter. Third quarter revenue was approximately $ 21 million, up 129% sequentially. As of the third quarter, Fidus has declared its dividend for the fourth quarter at 30 cents per common share, the same as the previous two quarters, plus an additional special dividend of 4 cents authorized by the board of directors. This brings the total payout for the quarter to 34 cents per common share and puts the yield at 9.5%. Raymond James analyst Robert Dodd likes what he sees at Fidus, especially the dividend outlook. “We continue to view risk / reward as attractive at current levels – with stocks trading below the pound, strong base dividend coverage expected from NII… We expect FDUS to solidly out-earn its base dividend. quarterly of $ 0.30 / share throughout our projection period. As a result, we are projecting modest top-ups… ”Dodd assigns an outperformance (ie buy) rating to the stock and sets a target price of $ 14. At current levels, this target indicates an increase of 10.5% in the coming months. (To look at Dodd’s track record, click here) Wall Street is a bit more divided on FDUS stocks, a circumstance reflected in the Moderate Buy analyst consensus rating. This rating is based on 4 reviews, including 2 purchases and 2 holds. The shares are priced at $ 12.66, and the average price target of $ 13.33 suggests a slight rise of 5% from current levels. (See FDUS market analysis on TipRanks) TPG RE Finance Trust (TRTX) Returning to the REIT industry, we take a look at TPG RE Finance Trust, the real estate finance arm of global asset firm TPG. This REIT, with a market capitalization of $ 820 million, has built a portfolio of commercial mortgages with a total value of $ 5.5 billion. The company is a provider of original commercial mortgages starting at $ 50 million, primarily in primary US markets. The bulk of the company’s loans and properties are concentrated in the east. Like many finance companies, TPG RE Finance suffered serious losses in the first quarter due to the corona pandemic crisis – but it has since largely recovered. Third quarter revenue was $ 48 million, up 9% year over year. During the quarter, TPG received loan repayments totaling $ 199.6 million, a strong result, and at the end of the quarter, the company had $ 225.6 million in cash or cash equivalents. was able to easily fund its dividend of 20 cents per common share. , at T3. For the fourth quarter, the company recently declared not only the regular payment of 20 cents, but also a special one-time cash dividend of 18 cents. Taken together, the dividends yield a yield of 7.5%, almost 4 times the average for S&P listed companies. Returning to Raymond James’ REIT expert Stephen Laws, we find he is also bullish on TRTX. “TRTX has underperformed since the release of third quarter results which we believe creates an attractive buying opportunity… We expect core earnings to continue to benefit from LIBOR floors in loans and further investment. will resume in 1Q21. The company’s portfolio combined retail and hospitality exposure of 14%, which is below the industry average of 19% … ”To that end, Laws rates TRTX as a strong buy and its goal price of $ 13 suggests a hike of around 22% in 2021. (To see Laws track record, click here) This stock also holds a strong analyst consensus buy rating, based on 3 reviews of unanimous purchase established in recent weeks. The shares are priced at $ 10.67 and the average target of $ 11.00 suggests a slight rise of 3% from current levels. (See TRTX Stock Analysis on TipRanks) For great ideas for trading dividend stocks at attractive valuations, check out the Best Stocks to Buy from TipRanks, a newly launched tool that brings together all the information about stocks from TipRanks. only those of featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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