3 shares with “strong buy” with over 9% dividend
Markets ended 2020 on a high note and started 2021 on a bullish trajectory. All three major indices have recently risen to full-time highs as investors apparently looked beyond the pandemic, hoping for signs of a rapid recovery. Veteran strategist Edward Yardeni sees the economic recovery bringing its own downturn. As the COVID vaccination program allows for further economic opening, with more people returning to work, Yardeni predicts a wave of captured demand, rising wages and rising prices ̵
1; in short, a recipe for inflation. “In the second half of the year, we may be looking for some consumer price inflation that would not be good for overvalued assets,” Yardeni noted. The warning sign to look for is higher interest rates in the government bond market. If the Fed eases low interest rate policy, Yardeni sees government bonds reflect the change first. A situation like this is tailored for defensive stock games – and it will naturally make investors look at high-yield dividend stocks. When we open the TipRanks database, we have found three stocks with a hat trick of positive signs: A strong buy rating, dividend yields starting at 9% or better – and a recent analytical review pointing to double-digit upward. CTO Realty Growth (CTO) We start with CTO Realty Growth, a Florida-based real estate company that last year made an exciting decision for dividend investors: The company announced that it would change its tax status to a real estate investment trust (REIT) for the tax year ending it. December 31, 2020. REITs have long been known for their high dividend yields, a product of tax code requirements, that these companies return a high percentage of their profits directly to shareholders. Dividend is the usual route for this return. CTO has as its background a varied portfolio of real estate. The holdings include 27 income properties in 11 states, totaling more than 2.4 million square feet along with 18 rental billboards in Florida. The income properties are mainly shopping malls and retail stores. During the third quarter, the latest reported, the CTO sold about 3,300 acres of undeveloped land for $ 46 million, acquired two income properties for $ 47.9 million, and charged ~ 93% of the contractual land rent due. The company also approved a one-time special distribution in connection with its transition to REIT status; The purpose was to bring the company in line with the income return adjustment in the tax year 2020. The one-time distribution was made in cash and shares and amounted to $ 11.83 per share. shares. The regular dividend paid in Q3 was 40 cents per share. common stock. This was increased in Q4 to $ 1, a jump of 150%; Again, this was done to bring the company in line with REIT status requirements. At the current dividend rate, the return is 9.5%, far higher than the average among the peer companies in the financial sector. Analyst Craig Kucera of B. Riley believes the CTO has plenty of opportunities going forward to expand its portfolio through acquisitions: “The CTO hit the high end of expected $ 33 million in disposition guidance. in Q4 20, bringing YTD dispositions to nearly $ 85 million. with the largest disposition associated with the exercise of a tenant’s opportunity to purchase a building from the CTO of Aspen, CO. Following these dispositions, we estimate> $ 30 million. in cash and limited cash for further acquisitions and we expect the CTO to be active again in the 1st half. To this end, Kucera CTO is considering a purchase along with a price target of $ 67. At the current level, its target implies a 60-year upward potential. (To view Kucera’s track record, click here) In total, the CTO has 3 reviews on record from Wall Street analysts, and they all agree that this stock is a Buy, making the analyst agree on Strong Buy unanimously. The stock is priced at $ 41.85 and their average price target of $ 59.33 suggests room for ~ 42% growth in the coming year. (See CTO stock analysis on TipRanks) Holly Energy Partners (HEP) The energy sector with its high cash flows is also known for its highly paid dividends. Holly Energy Partners is a midstream transport operator providing pipeline, terminal and storage services to crude oil and petroleum distillate producers. Holly bases most of its activities in the Colorado-Utah and New Mexico-Texas-Oklahoma regions. In 2019, the last full year in which the numbers are available, the company experienced $ 533 million in total revenue. The company’s revenue slipped in 2020 in the first and second quarters, but rose again in the 3rd quarter, reaching $ 127.7 million. Holly reported $ 76.9 million in distributable cash flow – from which dividends are paid, an increase of more than $ 8 million over the previous year. This supported a 35-cent dividend payment per share. Ordinary stock or $ 1.40 on an annual basis. At the same rate, the yield gives a strong 10%. Well Fargo analyst Michael Blum noted the yield, “Our model suggests that distribution is sustainable at this level, as [lost revenue] offset by inflation stairs 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 price target of $ 20 and an overweight (ie Buy) rating. His goal involves a 38% cover in the next 12 months. (To view Blum’s track record, click here) “Our rating primarily reflects the partnership’s stable, fee-based cash flows, robust returns and conservative balance sheet,” Blum added. For the most part, Wall Street agrees with Blum’s assessment of HEP, as evidenced by the consensus assessment of the Strong Buy analyst. This rating is supported by 6 reviews, divided 5 for 1 Buys versus Hold. The average price target of $ 18.67 suggests that the stock has room to grow ~ 29% this year. (See HEP inventory analysis on TipRanks) DHT Holdings (DHT) Midstreaming is only part of the global oil industry transportation network. Tankers are another that moves crude oil, oil products and liquefied natural gas around the world in bulk. Bermuda-based DHT operates a fleet of 27 crude oil tankers, all classified VLCC (very large crude vessel). These vessels are 100% owned by the company and range in tonnage from 298K to 320K. VLCCs are the workhorses of the global oil tanker network. After four-quarters of consecutive earnings gains, even through the ‘corona half’ of 1H20, DHT posted a sequential decline in revenue from 2Q20 to 3Q20. The top line for the quarter fell from $ 245 million to $ 142 million. However, it is important to note that the 3Q revenue result still increased 36.5% year over year. EPS, at 32 cents, was a dramatic annual turnaround from the 6-cent loss announced in Q3 19. DHT has a history of adjusting its dividend when necessary to keep it in line with earnings. The company did so in the 3rd quarter, and 20-cents per. Regular share payment was the first dividend cut in 5 quarters. The general policy is positive for dividend investors, as the company has not missed a dividend payment in 43 consecutive quarters – an admirable record. At 80 cents per. Shares annually give a dividend of an impressive 14%. Kepler analyst Petter Haugen covers DHT, and he sees potential for increased returns in the company’s contract plan. Haugen noted, “With 8 out of 16 ships ending their TC contracts by the end of 1. quarter 2021, we believe that DHT is well positioned when we expect freight rates to be valued in H2 2021E. ” To go into more detail, Haugen adds, “[The] the main underlying drivers are still intact: fleet growth will be low (1% on average over 2020-23E), and the US will still end up being a net seaborne exporter of crude oil, providing further export growth from US demand for tankers. We expect spot rates to improve again in 2021E, shortly after oil demand returns to normal. We expect average VLCC rates of $ 41,000 / day in 2022E and $ 55,000 / day in 2023E. “In accordance with his comments, Haugen DHT is considering a purchase. His target price of $ 7.40 suggests that this stock may grow 34% in the coming months. (Click here to see Haugen’s track record) The rest of the street comes on board. 3 purchases and 1 team allotted in the last three months provide a consensus on a strong purchasing analyst. In addition, the average price target of $ 6.13 $ puts the potential upwards of ~ 11%. (See DHT stock analysis at TipRanks) To find great dividend trading ideas for attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ stock insights. Disclaimer: The statements in this article are solely from the featured analysts. The content is intended for informational purposes only. It is very important to do your own analysis before making an investment.