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2 “Strong Buy” dividend shares yield at least 7%
A number of factors come together in the market picture and indicate a possible change in conditions in the medium term. These include rising commodity prices, specifically oil prices, which have risen recently. In addition, the number of jobs announced in January earlier this month was disappointing at best – and worst, at worst. However, this increases the chances that President Biden and the Democratic Congress will establish a large-scale COVID relief package. These factors probably pull in different directions. The rise in oil prices indicates a forthcoming increase in supply, while the possibility of further stimulating cash holds good promise for market liquidity fans. However, these developments point to a possible price-reflection climate. Against this background, some investors are looking for ways to rebuild and defend their portfolios. And that will bring us to dividends. By offering a steady income stream, no matter what the market conditions are, a reliable dividend stock provides an indication for your investment portfolio if the stock is no longer valued. And so we opened the TipRanks database and pulled the details of two high-yield stocks – at least 7%. Even better, these stocks are considered by Strong Buys analysts to be Strong Buys. Let’s find out why. Williams Companies (WMB) The first stock we are going to look at is Williams Companies, a natural gas processing company in Oklahoma. Williams controls pipelines for natural gas, natural gas fluids and oil collection, in a network that stretches from the Northwest of the Pacific Ocean, through the Rockies to the Gulf Coast, and across the South to the Mid-Atlantic Ocean. Williams’ core business is the processing and transportation of natural gas, with crude oil and energy generation as secondary operations. The company’s footprint is large – it handles almost one – third of all natural gas consumption in the US, both residential and commercial. Williams will report its 4Q20 results at the end of this month, but the Q3 results are instructive. The company reported $ 1.93 billion at the top, up 3.5% year-over-year, but up 8.4% quarter-over-quarter, and the highest quarterly revenue released so far for 2020. from the second quarter, but by 38% higher than in the previous year. The report was widely considered to meet or exceed expectations, and the stock rose 7% in the two weeks following its release. In a move that could signal solid Q4 earnings on the way, the company announced its next dividend, due on March 29. The 41 percent per ordinary share payment is 2.5% higher than the previous quarter and up to $ 1.64 annually. At that rate, the dividend yields 7.1%. Williams has a 4-year history of growing and maintaining dividends, and usually increases payments in the first quarter of the year. 5-star analyst TJ Schultz, who covers the stock for RBC, wrote: ‘We believe Williams can reach the lowest point of its EBITDA lead in 2020. Although we expect short-term growth in the NO to moderate, we think WMB should benefit from less than previously related gas from the Permian. Given our long-term view, we estimate that Williams could remain comfortable within the investment grade credit statistics through our forecast period and keep the dividend intact. For this purpose, Schultz rates WMB a better performance (ie buy), and its price target of $ 26 indicates an upward trend of 13% in the next 12 months. (To view Schultz’s record, click here.) With 8 recent reviews on record, including 7 Buys and just 1 Hold, WMB has earned its Strong Buy consensus rating. While the stock has risen in recent months to $ 23, the average price target of $ 25.71 implies that it still has room for ~ 12% growth this year. (See WMB stock analysis on TipRanks) AGNC Investment (AGNC) Next is AGNC Investment, a real estate trust. It is no surprise to find a REIT as a dividend champion. According to tax codes, the tax codes must return a high percentage of profits directly to shareholders, and regularly use dividends as the instrument of compliance. AGNC, based in Maryland, focuses on MBSs (mortgage-backed securities) with US Government support and guarantees. These securities make up about two-thirds of the company’s total portfolio, or $ 65.1 billion out of a total of $ 97.9 billion. AGNC’s latest quarterly returns for 4Q20 show $ 459 million in net income, and a net income per share of $ 1.37. While lower, the EPS was the strongest recorded for 2020. For the full year, AGNC reported $ 1.68 billion in total revenue and paid out $ 1.56 per share in dividends. The current dividend, 12 cents per ordinary share paid out monthly, will be up to $ 1.44 annually; The difference from last year’s higher annual rate is due to a dividend cut implemented in April due to the coronavirus crisis. At the current rate, the dividend offers investors a solid return of 8.8% and is easily affordable for the company given current income. Among AGNC’s bulls is Maxim’s analyst Michael Diana, who wrote: ‘AGNC has maintained a competitive return on book value compared to other mortgage REITs (mREITS), even though it has earned its dividend and repurchased shares. While turmoil in the mortgage markets at the end of March led to losses and lower book value for all mortgage REITs, AGNC was able to meet all its margin calls and, more importantly, take relatively less realized losses and thus more earnings power after sustaining turmoil. Based on all of the above, Diana AGNC is rating a buy, along with a price target of $ 18. This figure implies an upward potential of ~ 10% from current levels. (To see Diana’s record, click here) Wall Street is on the same page. Over the past few months, AGNC has received 7 Buys and a single Hold – this is all a consensus rating from Strong Buy. However, the average price target of $ 16.69 indicates that equities will remain limited for the foreseeable future. (See AGNC stock analysis on TipRanks) Visit TipRanks ‘best-selling stocks, a newly launched tool that unites all of TipRanks’ equity insights, to trade good ideas for dividend stocks at attractive valuations. 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.