3 large dividends that give over 7%; Raymond James says ‘buy’
Wall Street’s investment firm burns midnight oil as we approach the end of 2020 and publishes New Year’s and New Year’s forecasts, both for investor build-up. That is the obvious point: we are in a moment of growing markets, and investor sentiment is high now that the choice has been decided and COVID vaccines have emergency approval and enter the distribution networks. to fight the virus in winter slows economic recovery. Whether the economy will really be refueled or not is yet to be seen. Meanwhile, Raymond James strategist Tavis McCourt has published his views on the current situation, and his comments take into account. First, McCourt notes that investors are focused on the good news: “[The] the stock market is more focused on vaccine distribution and complete reopening of economies in 2021
, and so far negative data points have largely been removed. Looking ahead, McCourt writes over the next two years: “We believe the logical outcome of 2021 (and 2022 for that matter) is a likely” return to normalcy “with strong EPS growth offset by lower P / Es that prevent change. in vaccine history. We expect that cyclical sectors and equities with smaller equities will continue to outperform, as is common in early cycle markets … ”Raymond James’ research analysts have searched the markets to buy the“ right ones ”, and their choices are taking a closer look. They have tapped high-yield dividends as an investment game of their choice. The TipRanks database highlights three of JMP’s choices – stocks with a yield of 7% or better – and which the investment firm sees up or better by 10%. New Residential Investment (NRZ) The Real Estate Investment Trust (REIT) segment has long been known for its high and reliable dividends, a function promoted by tax rules that stipulate that these companies must return a certain share of the profits directly to investors. New Residential Investment is based in New York City and is typical of its sector. The company’s portfolio includes mortgages, mortgage rights and the origin of the loan. NRZ focuses its activities on the housing sector. NRZ is a mid-cap company with a market value of $ 4.13 billion and a portfolio worth $ 5.72 billion. The company’s revenues have increased since the second quarter of 2020, following steep losses during the corona recession in the first quarter. However, earnings in the third quarter came in at 19 cents per share, down from 54 cents last year. But even with this loss, NRZ made sure to maintain the dividend, and in fact did more than that. The company raised its Q3 dividend to 15 cents per ordinary share, in continuation of an interesting story. Back in the first quarter, the company distributed the usual share dividend at 5 cents, to preserve capital during the corona crisis. The company has since increased its dividend by 5 cents in each subsequent quarter, and the Q4 payout, announced in mid-December, is 20 cents per ordinary share. At that rate the annual dividend to 80 cents and the return exceeds 7.87%. In addition to increasing dividends, NRZ has also announced a $ 100 million repurchase program. The repurchase is for preferred share shares, and follows the existing repurchase policy for ordinary shares. Analyst Stephen Laws writes in his coverage of NRZ for Raymond James: “We expect strong volumes of origin and attractive gains on sales margins to drive strong results, and we still expect a dividend increase in 4Q […] For 4Q20, we increase our core earnings estimate by $ 0.02 per share to $ 0.35 per share. For 2021, we increase our earnings estimate by $ 0.08 per share to $ 1.31 per share. In line with these comments, Laws shares are considering a better result (ie buy). His target price of $ 11.50 implies a one-year upside of 16% (To see Laws’ track record, click here) It is not often that Analysts all agree on a stock, so when that happens, take note.NRZ’s strong buy consensus rating is based on a unanimous 8 buy in. The stock’s average $ 11.36 price target suggests 14% and a change from the current stock price of $ 9.93. (See NRZ stock analysis on TipRanks) Fidus Investment Corporation (FDUS) Then there is a business development company, Fidus Investment, which is one of many in the Mid Market Financing niche, offering debt solutions and capital access to smaller companies that may not be able to Secure lending from the major markets.Fidus has inv properties in 68 companies with a total value of $ 697 million.The largest part of this portfolio, 59%, is secondary mortgages, and the rest is mainly distributed between subordinated debt, first mortgages n and equity-related securities. The company has seen revenues win through the second and third quarters of 2020, after negative results in the first quarter. The third-quarter top line came in at $ 21 million, up an impressive 129% sequentially. Since the third quarter, Fidus has declared its dividend for the fourth quarter, with 30 cents per ordinary share, the same as the previous two quarters, plus an additional 4 percent special dividend approved by the board. This brings the total payment for the quarter to 34 cents per ordinary share, and sets the return at 9.5%. Raymond James analyst Robert Dodd likes what he sees in Scam, especially the prospects for dividends. We continue to see the risk / return as attractive at the current level – with shares traded below book, solid forecast base dividend coverage from NII … We estimate FDUS solid over-income of its quarterly dividend of $ 0.30 per share throughout our projection period. As a result, we are planning modest additions … ”Dodd puts an Outperform (ie Buy) rating on the stock, and sets a target price of $ 14. At the current level, this target indicates an upside of 10.5% in the coming months. (To see Dodd’s track record, click here) Wall Street is somewhat more divided on FDUS shares, a circumstance that is reflected in the consensus assessment for Moderate Buy analysts. This rating is based on 4 reviews, including 2 buy and 2 hold. Shares are priced at $ 12.66, and the average price target of $ 13.33 suggests a modest 5% upside from the current level. (See FDUS share analysis on TipRanks) TPG RE Finance Trust (TRTX) When we return to the REIT sector, we look at TPG RE Finance Trust, the real estate financing part of the global asset company TPG. This REIT, with a market value of $ 820 million, has built a portfolio of commercial mortgages for a total of $ 5.5 billion. The company is a provider of original commercial mortgages starting at $ 50 million, mainly in US primary markets. The largest share of the company’s loans and properties is centered in the East. Like many finance companies, TPG RE Finance saw serious losses in the first quarter due to the corona pandemic crisis – but has since recovered to a large extent. Revenue in the third quarter reached $ 48 million, an increase of 9% compared to the previous year. During the quarter, TPG received loan repayments totaling $ 199.6 million, a solid result, and by the end of the quarter, the company had $ 225.6 million in cash or cash equivalents. The company was able to finance the dividend of 20 cents per ordinary share. , in the 3rd quarter. In the fourth quarter, the company recently declared not only the 20-cent regular payout, but also an 18-cent special cash dividend. In total, the dividend gives a return of 7.5%, almost 4 times higher than the average found among S&P listed companies. When we return to Raymond James’ REIT expert Stephen Laws, we find that he is also bullish on TRTX. “TRTX has underperformed since we reported 3Q results, which we believe creates an attractive buying opportunity … We expect core earnings to continue to benefit from LIBOR floors in loans and expect new investments to resume in the first quarter. The company’s portfolio has combined retail and hotel exposure of 14%, which is below the sector average of 19% … ”For this purpose, Laws TRTX is considering a strong buy and its price target of $ 13 suggests ~ 22% upside in 2021. (To see Laws ‘track record, click here) This stock also has a strong Buy rating from the analyst’s consensus, based on 3 unanimous Buy ratings set in recent weeks. Shares are priced at $ 10.67, and the average target of $ 11.00 suggests a modest 3% upside from the current level. (See TRTX stock analysis on TipRanks) To find great dividend trading ideas for attractive valuations, visit TipRanks ‘Best Aks to Buy, a recently launched tool that unites all of TipRanks’ equity insights. Disclaimer: Opinions expressed in this article are solely those of the selected analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.