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3 “Strong Buy” shares with a dividend yield of over 9%
Markets ended 2020 on a high note and started 2021 on a bullish path. All three major indices recently hit all-time highs as investors apparently looked beyond the pandemic and hoped for signs of a rapid recovery. Veteran strategist Edward Yardeni sees the economic recovery bringing its own slowdown. As the COVID vaccination program enables greater economic openness, with more people returning to work, Yardeni predicts a pent-up wave of demand, rising wages and rising prices – in short, a recipe for inflation . “In the second half of the year, we might be on the lookout for consumer price inflation that might not be good for overvalued assets,” Yardeni noted. The warning sign to look for is rising yields in the Treasury bill market. If the Fed loosens its low rate policy, Yardeni sees the T-bills reflect the shift first. A situation like this is tailor-made for defensive stocks – and that will naturally get investors interested in stocks. high yield dividend. Opening the TipRanks database, we found three stocks showing a triple of positive signs: a Strong Buy rating, dividend yields from 9% or more – and a recent analyst review showing a double-digit rise. . CTO) We’ll start with CTO Realty Growth, a Florida-based real estate company that last year made an exciting decision for dividend investors: the company announced it would change its tax status to that of a real estate investment trust (REIT) for the tax year ending December 31, 2020. REITs have long been known for their high dividend yields, a product of tax code requirements that such companies pay a high percentage of their profits directly to shareholders. Dividends are the usual route of this return. For the context, CTO holds a varied portfolio of real estate investments. The holdings include 27 income properties in 11 states, totaling more than 2.4 million square feet, as well as 18 rental billboards in Florida. Income properties are mainly shopping centers and retail outlets. In the third quarter, the most recent reported, the CTO sold some 3,300 acres of undeveloped land for $ 46 million, acquired two income properties for $ 47.9 million, and collected about 93% of the rents. basic contractual due. The company also authorized a one-off special distribution, as part of its transition to REIT status; its goal was to bring the company into compliance with performance regulations in the 2020 tax year. The one-time distribution was made in cash and shares, and totaled $ 11.83 per share. The regular dividend paid in Q3 was 40 cents per common share. This was increased in the fourth quarter to $ 1, a jump of 150%; again, this was done to bring the company into compliance with the requirements of the REIT statute. At the current dividend rate, the yield is 9.5%, well above the average for comparable companies in the financial industry. Analyst Craig Kucera, of B. Riley, believes that the CTO has many options to expand its portfolio through acquisition: “CTO hits the high end of early divestment forecast at $ 33 million in 4Q20, bringing cumulative provisions to nearly $ 85 million, with the largest disposition related to the exercise of a tenant’s option to purchase a building from the CTO in Aspen, CO. After these arrangements, we estimate> $ 30M in cash and restricted cash for additional acquisitions, and we expect the CTO to be active again in 1H21. To that end, Kucera assigns the CTO a buy with a price target of $ 67. At current levels, its target implies a potential increase of 60% over one year. (To see Kucera’s track record, click here) Overall, the CTO has logged 3 reviews from Wall Street analysts, and they all agree that this stock is a buy, which is the consensus analyst consensus on Strong Buy. The shares are priced at $ 41.85, and their average price target of $ 59.33 suggests room for growth of around 42% over the coming year. (See CTO Stock Market Analysis on TipRanks) Holly Energy Partners (HEP) The energy sector, with its high cash flow, is also known for its high paying dividend stocks. Holly Energy Partners is a mid-size transport player in the industry, providing pipeline, terminal and storage services to producers of crude oil and petroleum distillates. Holly bases most of her operations in the Colorado-Utah and New Mexico-Texas-Oklahoma areas. In 2019, the latest full year for which figures are available, the company posted total revenue of $ 533 million. Company revenue in 2020 slipped in the first and second quarters, but rebounded in the third quarter. , reaching $ 127.7 million. Holly said distributable cash flow – from which dividends are paid – of $ 76.9 million, up more than $ 8 million year-over-year. This supported a dividend payment of 35 cents per common share, or $ 1.40 annualized. At this rate, the dividend pays a strong 10%. Noting the dividend, Well Fargo analyst Michael Blum wrote: “Our model suggests that the distribution is sustainable at this level because [lost revenue] is offset by inflation escalations in HEP’s pipeline contracts and contributions from the Cushing Connect JV project. About 80% of HEP’s distribution is tax-deferred. Blum gives HEP a target price of $ 20 and an overweight (ie buy) rating. Its target involves an increase of 38% for the next 12 months. (To view Blum’s track record, click here) “Our rating primarily reflects the partnership’s stable and remunerated cash flow, robust performance and conservative balance sheet,” added Blum. For the most part, Wall Street agrees with Blum’s assessment of HEP, as seen in analyst Strong Buy’s consensus rating. This rating is supported by 6 evaluations, divided between 5 and 1 purchases compared to Hold. The average price target, at $ 18.67, suggests the stock could rise about 29% this year. (See HEP Stock Analysis on TipRanks) DHT Holdings (DHT) Midstreaming is only part of the transportation network of the global oil industry. Another is tankers, which transport crude oil, petroleum products, and liquefied natural gas around the world in bulk. DHT in Bermuda operates a fleet of 27 tankers, all rated VLCC (Very Large Crude Carrier). These vessels are 100% owned by the company and vary in tonnage from 298K to 320K. VLCCs are the workhorses of the global tanker network. four quarters of sequential revenue gain s, even through the half corona of 1H20, DHT recorded a sequential drop in revenue from 2Q20 to 3Q20. The top line this quarter went from $ 245 million to $ 142 million. It is important to note, however, that the third quarter revenue result was still up 36.5% year over year. EPS, at 32 cents, was a dramatic year-over-year turnaround from the 6-cent loss in 3Q19. DHT has a habit of adjusting its dividend, if necessary, to keep it in line with earnings. The company did so in the third quarter and the steady payment of 20 cents per share was the first reduced dividend in 5 quarters. The general policy is positive for dividend investors, however, as the company has not missed a dividend payment in the 43 consecutive quarters – an admirable record. At 80 cents per share annualized, the dividend yields an impressive 14%. Kepler analyst Petter Haugen is covering DHT, and he sees potential for increased returns in the company’s contract schedule. Haugen noted, “With 8 out of 16 vessels terminating their TC contracts by the end of Q1 2021, we believe DHT is well positioned for when we expect freight rates to appreciate in H2 2021E. ” For more details, adds Haugen, “[The] the main underlying drivers are still intact: fleet growth will be low (1% on average over 2020-23E) and the United States will still end up being a net exporter of crude oil by sea, thus increasing growth of exports thanks to the American demand for tankers. We expect spot rates to improve further in 2021E, shortly after oil demand normalizes. We forecast average VLCC rates of $ 41,000 / day in 2022E and $ 55,000 / day in 2023E. According to his comments, Haugen is evaluating DHT a purchase. Its target price of $ 7.40 suggests that this stock may grow 34% in the coming months. (To see Haugen’s record, click here) The rest of the street gets on board. 3 purchases and 1 expectation attributed during the last three months correspond to a consensus of Strong Buy analysts. Additionally, the average price target of $ 6.13 puts the potential upside to ~ 11%. (See DHT Stock Analysis on TipRanks) For great ideas for dividend-paying stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. . 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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