3 ‘Strong Buy’ Stocks With At least 6% Dividend Yield
There is so much going on in the markets, that it is difficult to know where to start and what to look for. On the red side of the ledger, it is clear that the headwinds are gathering. House Democrats are still rejecting the $ 1.8 trillion coronavirus and stimulus package released by the White House, saying President Trump̵7;s proposal is not far-fetched. The House Dems are pushing their own $ 2.2 trillion stimulus. At the same time, both Eli Lilly and Johnson & Johnson stopped their coronavirus vaccine programs, after the last company reported a “bad event” in early trials. It has more to do with worrying investors, as most hope for a ‘return to normal’ hanging on developing a working vaccine for the novel virus. And the earning season begins. Over the next few weeks, we will see Q3 results from each publicly traded company, and investors will eagerly watch the results. The consensus is, revenues are lower each year between 20% and 30%. With this in mind, we used the TipRanks database to obtain three dividend stocks that would give 6% or more. That is not all they offer. Each of these stocks has a Strong Buy rating, and the potential is reversed. Philip Morris (PM) First on the list is tobacco company Philip Morris. Stockholders, manufacturers of tobacco and alcohol products, have long been known for their good dividends. The PM has taken a different tactic over the past year, with a shift towards tobacco-free products, which are being sold as cleaner and less harmful to the health of users. One sign of this is the company’s partnership with Altria to launch and market iQOS, a heated non-tobacco product that will allow users to take nicotine without pollutants from tobacco smoke. The PM plowed more than $ 6 billion into the product. Given the regulatory and PR challenges surrounding vaping products, the PM believes non-smoked heated tobacco will prove to be a stronger alternative, with greater potential for growth. No matter, at the moment the PM’s main product remains Marlboro cigarettes. The iconic brand will remain a best seller, despite the long-term trend of public opinion against cigarettes. As for the dividend, the PM is, and remains, a true champ. The company has been raising dividend payments every year since 2008, and has reliably paid a quarter ever. Even corona could not derail that; The PM maintains its $ 1.17 quarterly payments by 2020, and the latest dividend, paid earlier this month, saw an increase of $ 1.20 per share. It made it annual at $ 4.80, and yields a yield of 6%. Covering the PM for Piper Sandler, analyst Michael Lavery wants to switch to smoke-free products, writing, “We remain strong in the strong vision of the long-term PM, and we believe that the momentum of iQOS throughout The COVID-19 pandemic has been impressive. IQOS has had strong user growth and profitability improvements, and the reopening of the store could help drive adoption of new users. ” Lavery shares the PM with an overweight (ie Buy), and his target price of $ 98 indicates a 24% year increase. (To view Lavery’s track record, click here) Overall, the PM’s Strong Buy Consensus rating is based on 9 reviews, breaking 8 to 1 on Buy vs. Hold. The shares are worth $ 79.10 and their $ 93.56 average price target indicates an 18% upside potential. (See PM stock review on TipRanks) Bank of NT Butterfield & Son (NTB) Butterfield is a small cap Bermuda based banking firm and provides a full range of services to customers on the island – and in the Caymans, Bahamas, and the Channel Islands, as well as Singapore, Switzerland, and the UK. Butterfield services include personal and business loans, savings accounts and credit cards, mortgages, insurance, and wealth management. Terfieldfield saw earnings and earnings slump in the first half of this year, in line with the overall pattern of banking services around the world – the global COVID -19 pandemic put a damper on business, and bankers felt the hit. Revenues in the last quarter of 2019 were 87 cents per share, and by 2Q20 dropped to 67 cents. While a significant drop, 21% is still better than expected. On the top line, revenues dropped to $ 121 million. NTB is reporting Q3 earnings later this month, and the forecast is for 63 cents EPS. Along with beating revenue forecasts, Butterfield is paying a strong dividend this year. By the second quarter, dividend payments were up to 44 cents per share, making the yield a stable 7%. When the current low interest rate is taken into account – the US Fed has set rates close to zero, and Treasury bonds are yielding less than 1% – NTB payments look better . Raymond James Donald Worthington, 4-star analyst with Raymond James, wrote Butterfield, “… Stable level of capital [provide] more than adequate loss absorption capacity in our view for any credit issues that may arise. Fee income stability has proven to be important given the effects of reducing rates on NII, where the bank actively manages costs to help earnings. We continue to believe that the dividend is safe today because of the low-risk loan portfolio, stable capital levels, and our forecast for a sub-100% dividend payment even under stressful outlook. we. “These comments support analyst Outperform (ie Buy) rating, and its target price of $ 29 suggests a 15% reversal for the coming year. (To watch Worthington’s track record, see click here) Overall, NTB has 4 recent reviews, including 3 Purchases and a single Hold, making the analyst agreement rating a Heavy Buy.These stocks have a $ 29 average target price, corresponding to Worthington’s. (See NTB stock analysis on TipRanks) Enviva (EVA) Last on our list is an energy company, Enviva. This company possesses an interesting niche in an important sector, producing “green” energy.In particular, Enviva is a manufacturer of processed biomass fuel, a derivative wood pellet sold at power generation plants.Fuel is cleaner combustible than coal – an important point in today’s political climate – and made from recycled waste (woodchips and sawdust) from the lumber industry. The company’s production facilities are located in South American, while the main customers are in the UK and mainland Europe. Economic shutdowns imposed during the corona pandemic reduced demand for energy, and Enviva revenues fell to 1H20, largely due to reduced demand. Earnings remained positive, however, and the EPS outlook for Q3 predicts a climb back to 45 cents – in line with strong earnings seen in the second half of 2019. Enviva showed a consistent commitment. in paying its dividend, and in the last quarter – the payment in August – the company raised the payment from 68 cents per share to 77 cents. This brought the annual dividend value to $ 3.08 per share, making the yield 7.3%. Even better, Enviva has been paying regular dividends over the past 5 years. Covering this stock for Raymond James is analyst Pavel Molchanov, who rates EVA as Outperform (ie Buy) and sets a $ 44 price target. Recently the appreciation of shares has brought the stock close to that target. Returning to his stance, Molchanov wrote, “The benefits of Enviva come from an ever-expanding customer base, and there is growth in high visibility through dropdowns. In the context of the massive coal retirement in electricity – including (until September 2020) 34 countries and 33 subnational jurisdictions with mandatory coal phase-outs … “(To view Molchanov’s track record, click here.) Enviva’s Strong Buy agreement is based on 4 Purchases and 1 Hold. The share price, obtained in previous sessions, was $ 42.60, and as mentioned, it closed at the $ 44.80 average price target. (See EVA stock analysis on TipRanks) To find great ideas for trading stock dividends on attractive values, visit TipRanks Best Buy Stocks, a newly launched unified tool all TipRanks equity perspectives. Delete: The opinions expressed in this article are those of the featured analysts. Content is intended to be used for informational purposes only. It is very important to do your own evaluation before making any investment.