These dividend stocks tick both boxes: a very high yield of
over 5% and a bullish outlook from the Street. This is pretty crucial as not
all dividend stocks make appealing investing propositions. Looking for those
with a bullish analysis from the Street is one way to sort the wheat from the
chaff. Using TipRanks stock screener, we scanned for high-yield stocks
with a ‘Strong Buy’ analyst consensus. That’s based on all the ratings the
stock received over the last three months.
“A commitment to a dividend can indicate a strong business and a management priority on returning cash to shareholders, both important drivers of long-term stock appreciation” writes JP Morgan. So with this bullish analysis in mind, let’s take a look at these 7 ‘Strong Buy’ dividend stocks now:
Six Flags (SIX)
SIX emerged from bankruptcy in April 2010, after it filed
Chapter 11 in June 2009 due to an unwieldy debt load and low park attendance.
Now however the company has a significantly de-levered
balance sheet and is under new management — with proven turnaround specialist
Jim Reid-Anderson at the helm.
On February 6, SIX’s board of directors declared a quarterly
cash dividend of $0.82 per share ($3.28 annually). The dividend will
be payable March 4, 2019.
This is on a 5.33% dividend yield, smashing the average
services dividend of just 1.99%. So far the company has now recorded 9 years of
Wells Fargo’s Timothy Conder (Track
Record & Ratings) has just upgraded Six Flags from hold to buy. He
explains that the turnaround strategy and cost savings continue to generate
greater than anticipated upside.
Conder calls SIX’s $475-$500M 2020 Adjusted EBITDA goal achievable — while improving free cash flow supports disciplined capital allocation, further deleveraging and the potential return of capital.
As the screenshot below shows, SIX has only buy ratings from the Street:
Targa Resources (TRGP)
Sentiment is shifting on the stock- with three analysts
upgrading TRGP from hold to buy in the last month. RBC Capital’s TJ
Schultz (Track Record & Ratings) is one of the best
analysts out there. He is betting on TGTP with a buy rating and $60 price
target (42% upside potential).
“While the recent commodity price volatility may put
pressure on TRGP’s gross margins in the immediate near-term, we think TRGP is
still well positioned to deliver top-tier EBITDA growth thru 2020” writes
He believes that Targa’s Permian footprint and downstream
integration are among the best in the midstream space. And that this provides
solid line of sight that cash flow growth goals are attainable even at current
As for dividends, Targa is paying out a jaw dropping 8.57% yield — which is huge, even among dividend stocks. The utilities sector average is 2.34%. This converts to a $3.64 annualized payout (paid quarterly).
Two Harbors (TWO)
On February 6, the company reported its Q4 earnings results. “Our confidence that TWO can cover the dividend in 2019 is based in part on 4Q18 core earnings of $0.47 per share (matching the dividend)” cheered Maxim’s Michael Diana (Track Record & Ratings) post-results.
He continues “TWO remains our top mortgage REIT pick,
because of: (1) its best-in-class, long-term interest rate risk management,
including use of MSRs; and (2) its attractive dividend yield of 13.3%.”
TWO pays out a very attractive dividend yield of over 13% (with a $1.88 annualized payout, paid quarterly). Out of four analysts covering the stock, three rate TWO a buy.
Blackstone Group (BX)
The company currently boasts — wait for it — a yield of
6.9%. Compare this to the average financial services company yield of just
3.14%. This translates into an annualized payout of $2.32 paid quarterly, with
a dividend growth of 6 years.
Blackstone has just released better-than-expected earnings
results. Although 4Q18 was a challenging quarter for worldwide markets, the
portfolios were all up for the year.
“We believe investors should find much to be pleased with in
BX’s report today” cheers Oppenheimer’s Allison M Taylor (Track
Record & Ratings). She has a $41 price target on Blackstone for 19%
The analyst concludes: “We think investors understand that BX’s breadth and size are advantageous, but likely under-appreciate that it remains a remarkable growth story. We continue to recommend the stock.”
Blackstone scores six back-to-back buy ratings from the Street in the last three months.
With a lucrative dividend yield of 6.9%, T is a dividend
stock that just cannot be ignored. Right now AT&T is tracking a $2.04
annualized payout, paid quarterly. That’s after dividend growth for34 years!
In comparison, the average tech stock pays a dividend of
The Street is also very bullish on AT&T. “T has a solid
balance sheet and an attractive dividend yield,” Oppenheimer analyst Timothy
Horan (Track Record & Ratings) tells investors. He sees
shares surging 39% to $41.
“We believe that combined with TWX, FCF/share could grow 6%
per year” says Horan. After much legal wrangling, AT&T’s $85 billion
acquisition of Time Warner closed in June.
Overall this ‘Strong Buy’ dividend stock has received 11 recent buy ratings, with only three analysts staying sidelined.
Vici Properties (VICI)
With a 5.3% dividend yield, investors currently receive
$1.15 annually (paid quarterly).
According to top Ladenburg analyst John Massocca (Track Record & Ratings), the company’s current valuation does not fully account for the company’s “multiple earnings growth drivers and potential cap rate compression.” He adds that VICI was created with a “highly visible pipeline of external growth prospects.”
Also worthy of note: Goldman Sachs’ Stephen Grambling recently upgraded VICI from hold to buy. That’s with a $23 price target.
Enterprise Products Partners (EPD)
Last but not least comes another basic materials stock. Enterprise Products Partners L.P. (EPD– Research Report) is a huge midstream natural gas and crude oil pipeline company, with over 51,000 miles of pipelines.
With a 6.21% dividend yield, EPD is currently paying out
$1.74 ever year (paid quarterly). EPD’s impressive dividend growth now spans 20
On February 1, the company announced a Q4 earnings beat. EPD
guided to 2019 net growth capex down 33% from 2018 and announced a $2B buyback
“We estimate EPD will increase FCF generation by >40%
this year, which should afford EPD with additional financial flexibility to
return value to unitholders through its buyback program or additional accretive
projects,” cheers RBC’s TJ Schultz (Track
Record & Ratings).
He calls the dividend stock ‘a core MLP holding with both offensive and defensive characteristics’ and estimates 23% upside potential from the current share price. Indeed, this is a stock with 100% Street support now.
Enjoy the Research Report on the Stocks in this Article:
The TipRanks database covers over 5,000 stocks from eight different sectors. Which stocks are the top-performing analysts recommending right now? Go to the Analysts’ Top Stocks Tool now
Source: TipRanks Blog