Business

These 2 high-yielding stocks tick all the boxes


In a financial environment rife with unprecedented uncertainty, investors are struggling. When it comes to finding a profitable investment strategy, traditional methods can be unreliable. So how should investors get out of the rut?

In times like these, a more comprehensive stock analysis can steer investors in the direction of profit. Instead of just looking at more conventional factors like fundamental or technical analysis, other indicators can play a major role in determining whether a particular stock is on a clear path of growth. are not.

TipRanks offers a tool that does exactly that. Its intelligence score measures eight key metrics including fundamentals and techniques and takes into account analyst, blogger and news sentiment as well as hedge fund and company insider activity. . After analyzing each metric, a unique score is generated, with 10 being the best possible result.

Use Best stocks to buy tool, we can go through the TipRanks database, filter the results to show only those names that have achieved a “Perfect 10” Smart Score and offer a high dividend payout of 7% or more. up. We found two that can tick all the boxes. Let’s jump right in.

Enterprise Product Partner (EPD)

We’ll start with Enterprise Products Partners, a midsize energy company. Midstream refers to companies that connect wellheads, where hydrocarbons are extracted, with customers down the distribution line; Midstream companies control pipeline networks, rail and road tankers, barges, refineries, processing plants, terminals and tank farms. Enterprise is in this business, transporting crude oil, natural gas, natural gas liquids and refined products through its network, centered on the Gulf Coast in Texas and Louisiana but expanding into Southeast, Appalachian, Great Lakes, Mississippi Valley, and Rocky Mountains.

This adds to a lucrative business, and in its recent Q3 2022 financial results, Enterprise reported net income of $1.39 billion, up 17% year over year. On a per-share basis, diluted EPS came in at 62 cents, 10 cents better than the previous year’s results.

Dividend investors are particularly interested in distributed cash flow, which increased 16% year-on-year to $1.9 billion. This amount is more than enough to fully cover the company’s declared dividend payment of 47.5 cents per common share. On an annualized basis, the dividend amounts to $1.9 per share and provides a steady return of 7.6%. The company has a history of paying reliable dividends since 1998.

Review this stock from Raymond James, 5 star analyst Justin Jenkins describes Q3 as ‘another stable quarter’ and writes, “The unique combination of asset integration, balance sheet strength and ROIC track record at Enterprise (EPD) remains the best in the industry. segment. We see EPD well positioned midstream from a volatility vs. recovery perspective, with most segments performing well… Financial dynamics only widen the chances of a return, with growth ongoing distribution and acquisition activity will hopefully become more important over time. Meanwhile, EPD is still trading at an attractive 7.6% yield…”

To support his bullish thesis, Jenkins rates EPD stock as a Strong Buy and his price target of $32 implies a 29% gain in a one-year time frame. (To see Jenkins’ achievements, click here)

The view from Raymond James is hardly the only optimistic one here; This stock receives a Strong Buy consensus rating based on 10 recent analyst reviews, of which 9 are Buy and 1 are Hold (i.e. Neutral). The stock is selling for $24.75, and an average price target of $31.67 suggests a 28% gain over the next 12 months. See EPD stock analysis.

Capital Rithm (RITM)

The second stock we’ll be looking at is Rithm Capital, a real estate investment trust (REIT). REITs are perennial dividend champions, as tax code regulations require them to return a large portion of profits directly to investors – and dividends are a convenient method of compliance. Rithm, which until August last year operated as New Residential, offers both lending and mortgage services to investors and consumers. The company’s portfolio includes a variety of instruments, including principal loans, real estate securities, commercial property and residential mortgage loans, and MSR-related investments. . Finally, MRS, which makes up 26% of the portfolio; Mortgage services accounted for 42% of the total. The company boasts more than $7.5 billion in net equity investments.

During the most recently reported quarter, Q3 of 22, Rithm showed $153 million in total earnings available for distribution. This amounts to 32 cents per common share. These numbers compare well to the $145.8 million total and 31 cents per share reported last quarter.

More importantly, the ‘earnings available for distribution’ easily pay out a 25 cent common stock dividend announced in September. At an annual rate of $1, Rithm’s dividend yields an impressive 11%.

Among the bulls is the analyst BTIG Eric Hagenwho reported on Rithm, and he was impressed with what he saw.

“We like the stability of cash flow in MSR’s seasoned portfolio, which we think will support the financing and liquidity it provides behind the asset. Looking ahead, we see less chance of dividend growth, which to some extent reinforces the discounted valuation. That said, with a longer-term view, we think the quality of the returns to the risk of the stock is undervalued… We think scalability is one of the points. the main divide we see for valuation in capital structure in our coverage right now, especially among most startups/services where leverage is heavily skewed more on unsecured debt,” Hagen commented.

Hagen maintains a Buy rating on RITM stock, and he has a price target of $13 to show potential for a massive 44% upside in the coming months. (To see Hagen’s achievements, click here)

Like Hagen, other analysts like what they’re seeing. With 6 Buys and only 1 Hold, information on the Street shows the stock as a Strong Buy. Additionally, an average price target of $11 implies a 22% upside potential. View RITM . stock analysis.

Keep up with the Best TipRanks smart score must provide.

deny the responsibility: The opinions expressed in this article are those of prominent analysts only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.

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