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2 Large dividend shares yielding 10%; RBC says ‘buy’
Rising commodity prices, additional federal stimulus and rising government bond yields are all raising inflation. Furthermore, there is a growing concern that equities – and especially technological equities – are now valued at non-reality valuations. Is the changing macroclimate about to pull the bull market back? Too early to tell, but it does suggest that a more prudent approach to investing may currently be a good move. And that will bring us to dividend stocks. Investors want an investment, something to protect their portfolio in the event of a market decline, and dividends offer exactly that. These profit-sharing payments to shareholders provide a steady stream of income that usually remains reliable even in a downturn. Analysts at RBC Capital have done a few pedestals for us and determined dividend-paying stocks that have maintained a high return of just over 10%. By opening the TipRanks database, we examine the details behind the payments to find out what buys these stocks captivatingly. Annaly Capital Management (NLY) Annaly Capital Management is an investment trust (REIT). Annaly has a portfolio of commercial real estate with a strong focus on retail space (31%) and office space (29%). Other major investments include multi-family homes, hotels and healthcare properties. The company has more than $ 100 billion in total assets. In the company’s 4Q20 results, Annaly showed an economic return of 5.1% for the fourth quarter, much stronger than the 1.8% reported for 2020 as a whole. The EPS reached 60 cents per ordinary share, covering more than the usual 22 cent quarterly dividend. This is the third consecutive quarter with the dividend at that level; at the annual rate of 88 cents per ordinary share, the dividend yields 10.7%. This is head-and-shoulders above the ~ 2% return found among peer companies in the financial sector. Annaly has a long history of adjusting its dividend payout to match earnings, making it a reliable payer. Of interest to investors, Annaly closed the fourth quarter with $ 8.7 billion in untaxed assets, including cash on hand. The company used this deep pocket to authorize an ordinary $ 1.5 billion repurchase program, to return capital to shareholders and boost stock prices. Kenneth Lee, 5-star analyst at RBC, likes what he sees in Annaly’s performance, writing: ‘We continue to shift Annaly’s diversified business model, strong liquidity and portfolio to agency MBS amid the current macro- background … Annaly has exposure to growth-based, credit assets, including residential and commercial mortgage loans and mid-market loans. We believe that diversification should enable NLY to turn between attractive investment opportunities. Consistent with these comments, Lee NLY rates a better performance (ie buy), along with a price target of $ 9.50. This figure implies a 14% lead for the coming year. (To see Lee’s performance history, click here. Overall, there is a broad consensus across Wall Street on the quality of NLY, as evidenced by the division of 7 to 1 among analysts’ ratings, which favor Buy over Hold and the stock gives a Strong Buy analyst consensus rating .. The stocks are currently trading at $ 8.22 and their average price target of $ 9 indicates an upward potential of 9.5% from that level. (See NLY stock- analysis on TipRanks) Sunoco LP (SUN) From REITs we move to the energy industry Sunoco LP is the largest wholesale distributor of motor fuel in the US and supplies more than 7,300 Sunoco filling stations in 33 states. , diesel, fuel oil, jet fuel, lubricating oil and petroleum – a complete range of petroleum products sold as branded and branded products.Sunoco also controls 13 storage terminals that maintain a safe supply for delivery to retailers. the retail center offers Sunoco equipment to filling stations – from pumps to toll services. The company’s diversified business has enabled Sunoco to remain profitable during the corona pandemic crisis. The EPS did have a negative impact in the first quarter, when demand fell at the height of the crisis, but recovered quickly in the second quarter and has shown year-on-year gains in each quarter since then. The quarter of the fourth quarter was 77 cents, up from 75 cents in the previous quarter. The distributable cash flow for the quarter was lower year-on-year, from $ 120 million to $ 97 million, and the company announced a quarterly dividend of 82.5 cents per ordinary share. It has been held steady since the previous quarter – and in fact it has been held steady at this level since November 2016. Sunoco has been paying out a reliable dividend for the past 8 years. The current payment is up to $ 3.30 per share annually and yields a return of 10.6%. Analyst Elvira Scotto, who discusses SUN for RBC, notes that the recent Arctic storm patterns in the continental US have negatively impacted sales volumes, but that they are still driven by other aspects. “SUN maintained its lead in 2021 and saw an improvement in volumes in January. “We do not expect the recent weather conditions to have a significant impact on SUN’s 2021 volumes,” said the 5-star analyst. “We believe that SUN shows a significant current income with an improved balance sheet. We expect SUN to maintain its distribution and improve its distribution coverage over time. Scotto rates SUN shares as a better performer (ie buy) and raises the price target from $ 36 to $ 38. The figure implies a 23% lead for the next 12 months. (Click here to see Scotto’s history.) SUN shares have a moderate buy rating from the analyst’s consensus, based on a series of reviews, including 5 buys, 2 investments and 1 sell. The stock has an average price target of $ 33.50, which offers an upward potential of 8% compared to the current trading price of $ 31. (See SUN stock analysis on TipRanks.) To find great ideas for dividend stocks that are at trade attractive valuations, visit TipRanks ‘best stocks to buy, a newly introduced tool that unites all the insights of TipRanks’ stocks. Disclaimer: The opinions expressed in this article are solely those of the proposed analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.