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3 large dividend stocks with a yield of at least 8%; Wells Fargo says “ buy ”
With the Georgia elections behind us and the Trump administration on the way out, the political landscape for the short to medium term is shaping up: the Biden administration will be able to respond to its progressive base, now that it rests on majorities – however slim – in both houses of Congress. Predictability is good for the markets, and we’ll probably have it, at least until 2022. So now is the time to lock in the defensive portfolio. Wells Fargo research analysts have searched the markets for the “good.” buys, and their choices deserve a closer look. The TipRanks database sheds additional light on three of the company’s choices – stocks with dividends paying 8% or more. seeking high yield dividends is one of the business development companies in the market. These companies provide specialist finance to the middle market, providing credit and finance to small and medium-sized businesses that would otherwise have difficulty accessing financial markets.Apollo Investment is a case in point, with an investment portfolio valued at $ 2. $ 59 billion. Apollo has investments in 147 companies, with an average exposure of $ 15.9 million. The bulk of its portfolio, 86%, is made up of senior secured debt. Healthcare, business services, aviation and transportation, and high-tech companies account for more than half of Apollo’s investment targets. In Q3CY20 (the company’s second fiscal quarter in 2021), Apollo posted an EPS of 43 cents per share, stable sequentially but down 18% year over year. The company had $ 268 million in available liquid assets and $ 287 million in available credit under its secured facility at quarter end. Apollo has since amended its revolving credit facility by extending the maturity until December 2025. On the dividend front, Apollo has maintained its payments to regular shareholders despite the corona pandemic. Apollo’s most recent payment, in November, was a regular dividend of 31 cents plus a special dividend of 5 cents. The current return is an impressive 11.6%. Covering AINV for Well Fargo, analyst Finian O’Shea noted, “The impact of Legacy has diminished, adding only $ 3 million to the line of high this quarter, for an annualized return on VF of around 5.5%. . We think there is very little downside to the NOI compared to the old book, and see any realization and redeployment as a big plus for the action. O’Shea gives Apollo an overweight (ie buy) rating and a price target which at $ 12.50 implies a 12% increase from current levels. (To see O’Shea’s track record, click here) Overall, Apollo recorded two reviews, and they’re split – 1 buy and 1 wait – for a moderate buy consensus view. The stock is selling for $ 11.17 and its average price target of $ 11.50 suggests a slight rise of 3%. (See AINV stock market analysis on TipRanks) Goldman Sachs BDC (GSBD) Next, Goldman Sachs BDS, is the banking giant’s entry into the business development segment of specialized finance. GSBD is a subsidiary of Goldman, and focuses on mid-sized companies, providing gated investment services and access to middle market credit. GSBD’s stock performance in 2020 has shown a steady rebound since the initial recession caused by the corona crisis last winter. At the end of the year, the stock was trading at its January 2020 levels. In November, the company felt confident enough to price an offer of $ 500 million in unsecured notes, at an interest of 2.875% and due January 2026. The funds raised will be used to repay the revolving credit facility, improving interest on existing debt. Also in November, GSBD reported EPS of 80 cents for the quarter ending September 30. Profits were strong enough to support a strong dividend of 45 cents per share – and the company announced a special dividend payment, 15 cents, to be paid in three installments in 2021. The regular dividend currently has a yield of over 9% . Among the bulls is Finian O’Shea of Wells Fargo, who also covers AINV. The analyst wrote: “[We] believe that the high quality investment platform and shareholder friendly structure will continue to generate attractive forward yields … GSBD is quality at a good price … For those who buy BDCs, GSBD will be probably still in the discussion of the portfolio as we see it, given With that in mind O’Shea assigns GSBD an overweight (i.e. buy), as well as a price target of 19, $ 50. This figure implies an increase of 5% from current levels. (To look at O’Shea’s track record, click here) Again, this is a stock with an equal split between buy and hold ratings, making it a consensus rating from analysts of moderate purchase. The shares are priced at $ 18.59 and the average price target of $ 19.50 matches that of O’Shea. (See GSBD stock market analysis on TipRanks) ExxonMobil (XOM) From BDCs we will move on to the oil industry. Exxon Mobil is a player in Big Oil, with a market capitalization of $ 190 billion and 2019 revenue (the latest year for which full-year figures are available) of $ 264.9 billion. dollars. The company produces about 2.3 billion barrels of oil equivalent per day, which places it in the top five of the world’s hydrocarbon producers. Low prices in 2H19 and the corona crisis in 1H20 have depressed revenues in during the first half of last year – but that reversed in Q3 when XOM declared $ 45.7 billion at the top line. Despite all the headwinds the oil industry has faced over the past 18 months, XOM has maintained its reliable dividend and paid out the most recent distribution in December 2020. This payout is down from year to year. other, but increased 40% sequentially. was 87 cents per common share, annualizing to $ 3.48 and yielding an 8.4% return. In a note on the big oil companies, Roger Read of Wells Fargo writes: “In 2021, we expect winds macro-favorable more favorable, but we realize that significant challenges exist and maintain an average price of Brent below $ 50… ”Turning in particular to XOM, the analyst adds:“ We do not expect production growth and only a minimal generation of free cash flow, which includes the proceeds of the sale. However, this represents a significant change from the past few years of heavy consumption of cash and increased debt. In our opinion, this is probably enough to push stocks a little higher and alleviate concerns about the sustainability of dividends. Based on his comments, Read puts XOM overweight (ie, buy), and his price target of $ 53 indicates a margin of 17%. upward growth in the coming year. (To view Read’s track record, click here) The fact that Wall Street still views the energy industry with a cautious eye is evident from the analysts’ consensus rating of XOM – Hold. This is based on 10 reviews, including 3 purchases, 6 holds, and 1 sale. The stocks are selling for $ 45.15 and their average price target of $ 47.33 suggests a slight rise of around 5% (see the analysis of XOM stocks on TipRanks) To get good ideas for dividend-traded stocks at attractive valuations, check out the best stocks to buy from TipRanks, a newly launched tool that brings together all the information about the TipRanks stocks. Disclaimer: The opinions expressed in this article are solely those of the 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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