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3 high dividend stocks that yield at least 8%; Analysts say “buy”
Do you like roller coasters According to Deutsche Bank, we expect some roller coaster volatility for the next several months, with short-term gains likely, followed by a decline in the second quarter and earnings in the second half. The company believes stock values will fall, potentially 5% to 10%, over the next three months for several reasons the company’s strategist, Binky Chadha, has outlined. “The stronger the effects of the stimulus are loaded from the start and the direct stimulus tests are clearly unique in around a quarter of the new package, the sharper the growth peak value is likely to be. The closer that macro-growth peak gets to warmer weather (which gives retail investors something else to do); and an increased return to work in the office the greater we expect the withdrawal, ”remarked Chadha. This is half time. In the longer term, Chadha expects markets to strengthen by the end of the year and has set a target of 4,100 for the S&P 500. This is above its previous target of 3,950 and suggests potential gains of 4% from current levels. So for investors, we see a rocky summer and autumn with some falls and gains in the markets. In this environment, a defensive game of stocks makes sense. It offers a certain stability of the portfolio as well as some insurance in case the profits should not materialize. Reliable dividend stocks, with their regular payouts, offer a stream of income that is independent of the stock price appreciation, as well as a stock profile that is initially less volatile. This makes them the ideal move for investors who are concerned about sustaining returns while dealing with high macro volatility. To do this, we used the TipRanks database to pull up three high yield dividend stocks with a common profile: a buy rating from the street analyst corps; considerable upside; and a reliable dividend of over 8%. Let’s see what the Wall Street pros have to say about her. Monroe Capital (MRCC) We start with Monroe Capital, a private equity firm investing in healthcare, media, retail and technology. Monroe focuses its business in minority and women-owned companies or companies with employee share ownership plans. Monroe provides these sometimes underserved populations with access to capital resources for business development. So far this year, Monroe has seen two contradicting trends: declining sales and earnings and rising share price. The company’s return on sales was $ 12.6 million, 6% lower than the third quarter and 25% year-over-year, while earnings per share declined 40% sequentially to 42 cents. In a year-on-year comparison, however, the EPS more than doubled. In terms of its share price, Monroe stock is up 60% over the past 12 months. On the dividend front, Monroe paid 25 cents per share in December; The next one is planned for the end of this month in the same amount. With an annualized payment of $ 1, the dividend is 9.8%. This compares favorably to the average return of 2% for comparable companies. The dividend caught the attention of Oppenheim analyst Chris Kotowski, who was rated 5 stars by TipRanks. “We continue to see a runway for eventual dividend coverage where the full fees are recognized as an expense as management increases the portfolio to a targeted 1.1–1.2 times leverage (from currently 1.0 times) and redissolve the currently liquidated funds as soon as they are liquidated.The main driver of a BDC’s return is its dividend payout over time, and we are confident that the new payout of $ 1.00 (equivalent to a return of ~ 10%) from MRCC is sustainable, ”says Kotowski. In line with his comments, Kotowski rates MRCC as an outperform (i.e. buy) and his target price of $ 12 suggests there is room for 25% growth in the coming year. (To see Kotowski’s track record, click here.) Analyst ratings on MRCC split 2 to 1 in favor of buy versus holds, making the consensus rating a moderate buy. The shares have a trading price of $ 9.59 and their average target of $ 11.13 implies an upward movement of 16% over the coming year. (See MRCC stock analysis on TipRanks) Eagle Point Credit Company (ECC) Let’s stick with the midsize financial sector. Eagle Point is another investment company trying to turn medium-sized debt securities into returns for investors. The company invests in CLO stocks and is focused on current income generation – in other words, to ensure a return for its own investors. While Eagle Point is a small-cap player, the company has $ 3 billion in assets under management – proof that it is above its weight. Last month, Eagle Point reported fourth quarter 20 earnings with earnings per share of 24 cents, down from 29 cents expected. However, the current result only showed a growth compared to the previous quarter and compared to the previous year, as both the 3rd quarter 20 and the 4th quarter 19 were 23 cents. When we turn to the dividend, we find that Eagle Point is doing something unusual. The company pays a monthly dividend, not quarterly. The current payment of 8 cents per common share has been held constant for over a year, and the company hasn’t missed a payout. At 96 cents per common share per year, the dividend yield is 8.4%. This is robust in every way. B. Riley’s 5-star analyst Randy Binner reports on Eagle Point, and he notes that the company should have no problem maintaining its dividend coverage going forward. “The company’s reported quarterly recurring CLO cash flows averaged $ 0.75 / share for the past 12 months. Similar recurring cash flows would leave a great cushion to service the future $ 0.24 quarterly dividend. The company announced cash on February 9 of $ 29.5 million. That cash on the balance sheet and serviceable quarterly dividend of $ 0.24 contribute to a favorable liquidity position, ”Binner wrote. Binner’s comments support a Buy recommendation for the stock and his target price of $ 14 implies a 12-month uptrend of 23%. (To see Binner’s track record, click here.) Wall Street takes the same stance on ECC as it does on MRCC: a consensus rating for moderate buy based on a 2: 1 split between buy and hold ratings. ECC shares have an average target price of $ 14, which is the same as Binner, and the shares trade for $ 11.41. (See ECC stock analysis on TipRanks.) Hess Midstream Operations (HESM) Midmarket financials isn’t the only place where big dividends can be found. Wall Street pros also recommend the energy sector, and that’s where we turn now. Hess Midstream is one of many companies in the midstream sector of the energy industry that provides and supports the infrastructure required to collect, process, store and transport fossil fuel products from the wellheads into the distribution network. Hess has a number of midstream assets in the North Dakota Bakken Formation that move crude oil and natural gas and their derivatives. Hess reported fourth quarter 20 results earlier this year, showing earnings of $ 266 million and earnings per share of 36 cents per share. Revenue increased 5% year over year and was relatively unchanged from the third quarter. EPS increased by 20% compared to the previous quarter, but fell sharply compared to the 87 cents reported in the fourth quarter of 19. The investor-interest company reported over $ 126 million in free cash flow that it used to fund its dividend. Hess pays its dividend quarterly and has a reputation for never missing out on payments. The company has steadily increased payment for the past four years, and the final dividend of 45 cents per common share was paid out in February. This dividend is considered “safe” as the company expects to generate free cash flow between $ 610 million and $ 640 million over the next year. Those funds will fully cover the dividend, and there will be around $ 100 million left. Analyst Alonso Guerra-Garcia, who writes from Scotiabank, sees free cash flow as Hess’ priority for the future. “We anticipate the focus this year will be on harvesting free cash flow (FCF) using buybacks and further leverage. Improved FCF profiles this year also position the group better for a recovery in demand in the second half of 21. Continued changes in energy policy and the energy transition may be headwinds this year, but we continue to prefer exposure to the more diversified companies with FCF the option of dividends (FCFAD) and torque versus recovery, ”the analyst said. To this end, Guerra-Garcia rates HESM as outperforming (ie buying), with a target price of $ 27 indicating a potential year-end gain of 26%. (To see Guerra-Garcia’s track record, click here.) There are only two ratings overall for this small-cap energy company, and they’re split evenly – a buy and a hold – giving Hess a moderate buy rating. The shares are trading for $ 21.41, and their average price target of $ 27 suggests a year-on-year move higher of 26%. (See HESM stock analysis on TipRanks.) To find great ideas for trading dividend stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.