2 “Strong Buy” stocks with a dividend yield of 7%
You may be flogged, trying to adapt to the market volatility these days. For now, volatility has become the law because investors are exiting large technology companies-a move that is driving down the entire market. With the decline in the number of new COVID cases and the decline in the number of unemployed weekly, there has been a bearish sentiment. Both are good news for the economy and will help justify increased economic opening. At the same time, the COVID relief plan passed by Congress is going through a legislative process that is expected to increase spending for consumers – coupled with the recent increase in oil prices, this has caused market observers to start thinking about inflation. The result: The 1
0-year bond yield of the U.S. Treasury Department reached 1.48%, a record high in a year. Therefore, investors’ funds are withdrawn from stocks and turned to bonds. Overall, this is a situation tailored to defensive stocks. High-yield dividends have won widespread favor from Wall Street stock analysts, and they have high upside potential as investors move toward high-yield dividends. These stocks enrich the investment portfolio and provide an income stream that can compensate for low stock appreciation. Using the TipRanks database, we found two dividend yields slightly higher than 7%. If this is not enough, then all three analysts will receive sufficient support from Wall Street analysts to obtain a consensus rating of “Strong Buy”. The Sixth Street Professional Loan (TSLX) financial sector is usually a source of high-yield dividends, so it makes sense to look at it here. As the name suggests, Sixth Street Professional Loan is a member of the credit industry, which provides capital and credit financing to small and medium-sized market companies. These small and medium-sized enterprises are the traditional engine of the American business sector, providing most of all the jobs created, and professional financial companies such as Sixth Avenue are critical to their success. In the past year, there have been two obvious trends in Sixth Street’s performance. First, when it was hit by the corona, the company’s earnings fell sharply, followed by a strong rebound in the second quarter of 20 years, after which the earnings per share number fell and returned to historical levels. Second, since bottoming in late March last year, the stock’s share price has slowly but steadily recovered its value. A quick glance at the numbers can prove this. TSLX showed a loss of profit in the first quarter of last year, but the earnings per share reported in the fourth quarter was 79 cents. Although a decrease of 34% from the previous quarter, it still increased by 41% from the same period last year. The stock also recovered its share price, rising 112% from the bottom of the “worrying panic”. Sixth Street’s stock experienced a short surge after the announcement of its fourth-quarter results earlier this month and the latest dividend announcement. The company’s earnings and revenues met expectations, and management announced a basic dividend of 41 cents per common share and a special dividend of $1.25. Sixth Street has a history of using special dividends to supplement basic payments. According to the current basic interest rate, the dividend yield is as high as 7.5%. Raymond James analyst Robert Dodd was impressed with the overall performance of Sixth Street, but especially liked the dividend potential here. He wrote: “With its regular replenishment, a large number of special dividends, and excess returns from basic dividends, we believe that TSLX can perform well in markets where it is difficult to find yields…” Dodd rated TSLX as outperforming the market ( That is to buy), his price target of $23.50 indicates that there is 8% room for stock growth in the coming year. (To view Dodd’s transaction history, click here.) In general, it is clear that Wall Street agrees with the quality of Dodd Sixth Street-the stock has 5 recent records on file, and all of them are “buys” ”Status, so that the consensus rating of “Strong Buy” is consistent. The stock price is $21.67, and their recent appreciation has only left a 6% upside below the average price target of $23. (See TSLX stock analysis on TipRanks) Barings BDC, Inc. (BBDC) Next is business development company Barings BDC. Like Sixth Street, Baring also provides financial services to mid-market companies. Baring’s services include capital access and asset management. The company invests in debt, equity and fixed income assets. It was reported in the last quarter that the company had a $1.12 billion investment portfolio at the end of the third quarter of 20 years. The last reporting quarter also saw Baring’s earnings expectations. Earnings per share were 17 cents, an increase of 21% over the previous quarter. Net operating assets increased to 90 cents per share, which is a lot more than the 10 cents on the same indicator a year ago. The company also showed $7.1 million in cash at the end of the third quarter. In addition to a safe financial situation, Ballins has also seen his shares regain the value they lost in the first attack of the coronavirus. The stock fell to its lowest point on March 18 last year. Since then, the stock has rebounded 91%. That is the third quarter. In the fourth quarter, Bank of Bahrain completed the merger with MVC Capital. The equity transaction will enable Ballins’ shareholders to own 73.4% of the combined entity (Ballins’ name will be used), while MVC shareholders will own the remaining 26.6%. It is expected that the enlarged Baring will show US$1.5 billion in assets under management; a report for the fourth quarter of 2020 to be released in March will provide detailed information. Baring’s dividend reflects the company’s steady growth. In the past two years, management has maintained an increase in quarterly dividend payments, from 3 cents per share to 19 cents in the March distribution announced earlier this month. Calculated at 19 cents per common share, the dividend yield is 7.8%. In a comment on Compass Point stock, analyst Casey Alexander made it clear that he agreed to pay dividends: “BBDC pre-announced that the NII for the 20th quarter is $0.19 per share, while our expectation is $0.16, and the market’s average estimate is $0.17. Obviously, this is driven by the increase in profitability on the Barings platform.” In addition, Alexander believes that even without considering the merger of MVC, the company can achieve stable business income. He wrote: “In addition to the assets acquired from MVC Capital, BBDC also generated $528 million in revenue. New investment commitments this quarter. These commitments spread across 24 new borrowers and 17 existing borrowers…” Alexander’s optimism The comment received a “buy” rating for the stock, and its price target of $10.25 means that the upside potential for the next 12 months is 5%. (To view Alexander’s track record, click here.) This is another “Strong Buy” analyst consensus rating stock with a consistent view; the last three comments have been on the buyer’s side. BBDC’s stock price is 9.66 US dollars, and the average target stock price is 11 US dollars, which means that one year’s upside potential is 13%. (See BBDC stock analysis on TipRanks) To find a good idea for dividend stocks that are traded at attractive valuations, please visit TipRanks’ “Best Buy Stocks”, a newly launched tool that integrates TipRanks All of the stock insights are combined together. Disclaimer: The views expressed in this article are only those of unique analysts. The content is for reference only. Before making any investment, it is very important to conduct your own analysis.