The S&P 500 is up 27% over the last 6 months, and Wall Street’s expert class is beginning to explain that we might be due for some deceleration. In part, this may be an application of physics to market activities– what goes up need to come down– but it may likewise be connected to an old market stating, ‘Buy in May and disappear.’ It’s a long-recognized pattern that the warmer months tend to see a slowdown in market activity.
Amongst the doubters is Stifel strategist Barry Bannister, who believes the great times might not stick around through 2021.
” When you think of it, the stock exchange is generally very strong from the 1st of November to the 30th of April. That’s the seasonality impact … [The S&P 500] went to right where it was supposed to at 4,200, it appears like it’s going to be. However it also argues that the summertime of 2021 will be challenging … That can be brought on by China tightening, which they’re doing, Europe being reluctant on fiscal, which they’re doing, and the United States dollar maybe reinforcing a bit, which weighs on global liquidity growth. So I believe it’s been a fun flight, and it’s generally strong in November to April, however it often fades,” Bannister suggested.
If Bannister’s views come close to the actual events, then it makes now the time to move toward a more varied, protective portfolio. Dividend stocks are a conventional protective play. A reputable dividend payer normally gains less in a bullish market, but offsets that with a stable dividend payment.
With this in mind, we’ve utilized the TipRanks’ database to discover three stocks offering dividend payment of 7% or much better, in addition to a Buy ranking from the Street. Let’s take a closer look.
Rural Gas Partners (SPH).
The energy industry isn’t all Big Oil. Households need fuel, too, and that’s where Rural Gas comes in. The company got its start marketing propane for house usage, and has actually considering that expanded to use a variety of fuels and fuel oils, in addition to natural gas and electric utility services, to the domestic, business, and agricultural markets. The company is headquartered in New Jersey and boasts 3,300 employees and operations in 41 states to more than 1 million customers through some 700 areas.
Suburban’s company shows a strong seasonal pattern, with the first and second quarters of the year having greater earnings and earnings than the third and fourth quarters. This was clear in the current 1Q21 report, with the pattern overlaid by losses due to the now-receding COVID pandemic. Q1 earnings can be found in at $305.2 million, below the agreement price quotes and likewise down 8.5% from the prior-year Q1. EPS was available in at 61 cents, down from 64 cents one year ago.
On a positive note, incomes are more than enough to pay the regular dividend, which the business has recently stated for payment on Might 4. The dividend, at 30 cents per typical share annualizes to $1.20 and provides a yield of 8.2%. Rural Lp has a long history of keeping the dividend payment trusted– and of changing the payment when needed to keep it in-line with earnings.
Covering SPH for Argus, 5-star expert David Coleman acknowledges the company’s powerlessness, however sees it as a total development proposition.
” Although Rural posted weaker-than-expected fiscal 1Q21 revenues, reflecting unseasonably warm weather and the impact of the pandemic, we keep in mind that market patterns for propane business are now enhancing. The business cut its quarterly dividend in half, to $0.30 per system, in July 2020; however, we believe that the cut was sensible and note that the stock still yields about 8%, which is attractive in a low-interest-rate environment,” Coleman composed.
To this end, Coleman rates SPH shares a Buy, and his $18 rate target suggests an upside of 21% for the year ahead. (To see Coleman’s track record, click on this link).
SPH has slipped under most experts’ radar; the stock’s Moderate Buy consensus is based upon just two recent Buy rankings. The shares are costing $14.85, and the $18 typical rate target matches Coleman’s. (See SPH stock analysis on TipRanks).
Rattler Midstream (RTLR).
Rattler Midstream, like Suburban Propane, lives in the energy universe– however Rattler is a midstream company, spun off of Diamondback Energy in 2018 to establish, run, and acquire midstream possessions in the parent business’s operating areas of the Midland and Delaware developments of Texas’ Permian Basin.
Rattler has been climbing up, for several months, out of a deep hole caused by the COVID pandemic and depressed demand. Greater oil prices are helping the company, and in Q4 Rattler reported $109.2 million in revenues, up from $96.5 million in Q3, but still down 12.8% from the year-ago quarter. EPS showed the same pattern; at 21 cents, it was up from 19 cents in the previous quarter, however down 25% year-over-year.
Even with incomes and earnings not fully recuperated from the pandemic hit, Rattler kept up its dedication to returning revenues to investors. The business redeemed 1.65 million typical shares during Q4, at an expense of $14.7 million, and authorized a Q4 dividend of 20 cents per share. The present payment annualizes to 80 cents per share, and offers a yield of 7.3%.
Covering Rattler for Raymond James, Justin Jenkins keeps in mind, “While RTLR has only one primary client, it is a financial investment grade large-cap near pure-play Permian manufacturer with scale. We also expect RTLR to recruit a little more generalist interest relative to peer MLPs thanks to its involvement with FANG.”.
Jenkins goes on to explain why he believes Rattler is sound proposition: “Once we move past the 1Q21 noise, we anticipate 2021 to be a reasonably quiet duration of strong execution for RTLR. While the capacity for a dropdown could create some headings, we anticipate a reasonably little, utilize neutral, and moderately valued deal that does little to shift the total story. Increasing confidence in the FANG outlook will enhance the relative standing of RTLR on a comparable basis.”.
Based upon the above, Jenkins rates RTLR an Outperform (i.e. Buy), and sets a $13 price target, suggesting ~ 19% advantage for the next 12 months. (To see Jenkins’ track record, click here).
In general, there are 6 analyst reviews on record here, consisting of 2 to Purchase and 4 to Hold, for an expert agreement of Moderate Buy. The typical rate target is $12, suggesting ~ 9% upside from the $10.97 trading cost. (See RTLR stock analysis on TipRanks).
Broadmark Real Estate Capital (BRMK).
Moving equipments, we’ll move over to the Property Financial investment Trust section. In a way, this is unavoidable; REIT companies are understood for their high yielding, reputable dividend payments, determined a minimum of in part by tax policies that need them to return a high share of profits direct to investors. Broadmark Real estate Capital holds a portfolio of home loans and mortgage-backed securities, with a concentrate on building and development. The business has moneyed over 1,200 loans over the past decade, for an aggregate of more than $2.8 billion.
In its newest quarterly report, for 4Q20, Broadmark reported making $194.8 million in loan dedications, and producing $32.5 million in leading line profits. The revenue was up 8.3% from the $30 million reported in the year-ago quarter, in addition to up 12.4% from Q3. EPS was 17 cents per share, a far cry from the 5-cent loss taped in 4Q19. The business reported finishing 2020 with over $223 million in money on hand.
Plenty of money and rising earnings and revenues implies that Broadmark can manage its dividend. The business pays this out monthly, and in April stated the May payment for 7 cents per common share. This annualizes to 84 cents per share, and offers financiers a yield of 7.8%.
B. Riley analyst Randy Binner, ranked 5-stars by TipRanks, sees a clear course ahead for Broadmark’s ongoing growth.
” Our view is that FY21 needs to see credit trends revert back to more normalized levels, which should be an included tailwind to net interest earnings … we see possible benefit to the stock as the company continues to resolve defaults, grows the public REIT portfolio and personal AUM, and gets the dividend growth story back on track in FY21,” the expert noted.
In line with those remarks, Binner puts a Buy rating on BRMK, along with a $12.50 price target, suggesting 15% upside in the year ahead. (To see Binner’s performance history, click on this link).
In general, BRMK gets a Moderate Buy rating from the expert consensus, based on 2 Buys and 1 Hold. The fairly small number of reviews reflects the ‘under the radar’ profile of a lot of REITs in the markets. Shares in BRMK cost $10.87, and the $11.75 typical price target recommends an 8% upside potential. (See BRMK stock analysis on TipRanks).
To discover excellent concepts for dividend stocks trading at attractive valuations, visit TipRanks’ Finest Stocks to Buy, a recently released tool that unites all of TipRanks’ equity insights.
Disclaimer: The viewpoints expressed in this post are exclusively those of the featured analysts. The content is intended to be used for educational functions only. It is extremely crucial to do your own analysis before making any financial investment.