The rally we've experienced in the stock markets has become something of a sensation. The rebound has been substantial, with the S&P 500 rising almost 34% from its March 23 trough.Even in the current buying mood, however, there are plenty of investors who want a cautious strategy. They believe that the future is uncertain, that given the combination of coronavirus, social unrest, and a Presidential election year, there is no way to truly predict market behavior. They are not necessarily wrong, but even the most cautious investors can develop a bullish strategy.With plenty of evidence for both the bulls and the bears, the smart play now is to buy into rising dividend stocks, shoring up the portfolio for whatever lies ahead. The advantage of such a fundamentally defensive strategy is obvious: stocks that are rising now will bring the immediate gains of share appreciation, while strong dividends will provide a steady income stream regardless of market conditions.Using TipRanks database, we’ve found three dividend stocks that are yielding at least 8%, and are backed by enough analysts to earn a “Strong Buy” consensus rating. Magellan Midstream Partners (MMP)The first stock we’ll look at here is Magellan Midstream. This Oklahoma-based company is major player in the oil and gas industry, with a market cap over $10 billion and an asset map that touches on most states east of the Rocky Mountains. Magellan transports both refined products and crude oil through a network of pipelines and terminals, including Gulf Coast marine terminals connecting to the export trade.The importance of midstream to the energy industry helped insulate Magellan from the economic downturn in Q1, and while earnings slipped sequentially, they still came in 24% above expectations. The $1.28 reported marked the fifth quarter in a row that MMP beat the earnings forecast. At the same time, the outlook for Q2 is less rosy, at just 73 cents per share.Last month, Magellan priced a $500 million issue of senior notes, due in ten years. These notes will help pay down higher interest debt that comes due next year, and improves the company’s liquidity position, important points in uncertain economic times. The new debt carries interest of 3.25%, a significant reduction in the company’s debt service payments.In addition to improving liquidity, MMP management also recently declared the $1.0275 per share quarterly dividend. This payment is the same as the previous quarter’s, which makes sense as the company has a pattern of raising the dividend every other quarter. At $4.11 annualized, the dividend yield is 8.58%.Wells Fargo analyst Praneeth Satish sees MMP as a reliable choice for dividend investors, writing, “The company intends to maintain the current quarterly distribution for the rest of the year… In the interim, MMP remains well positioned given its strong balance sheet and liquidity position, and ratable cash flow stream, in our view.”Satish rates the stock a Buy, and his $54 price target implies an upside potential of 14% for the year. (To watch Satish’s track record, click here)Magellan’s Strong Buy analyst consensus rating is based on no fewer than 14 Buys set in recent weeks, along with 3 Holds. Some caution is evident in the average price target, which at $49.82 represents a 6.5% premium from the $46.77 trading price. (See Magellan stock analysis on TipRanks)New Mountain Finance (NMFC)Next up, New Mountain Finance, is a business development corporation. The company controls a portfolio of credit funds and public and private equity worth over $20 billion. Earnings on the company’s portfolio actually increased in Q1, rising from 32 to 34 cents per share. The Q1 number beat expectations by over 6%.In a nod to the current corona crisis, management lowered the quarterly dividend from 34 cents to 30 cents, but even the lower dividend still gives an annualized yield above 11.92%. Investors can also note that company officers – the insiders, if you will – have been on a buying spree lately. Their sentiment on NMFC is strongly positive, and insiders have purchased over $7 million worth of company stock in the past three months.Oppenheimer analyst Chris Kotowski assigned a Buy rating on this stock, citing the company’s resiliency. His $11 price target suggests a 6.5% upside for the next 12 months. (To watch Kotowski’s track record, click here)In his comments, the 5-star analyst wrote, “Given the quality and liquidity of NMFC's portfolio as well as support from its manager (which supplied a $50M line of credit and deferred fees), we think they should be able to get this situation in hand in a quarter or two.” NMFC shares have recently powered right through their average price target, another indicator of investor confidence. The stock sells for $10.33, nearly 1% above the average price target of $10.25. Expect Wall Street’s investors to revisit their expectations here in the near future. In the meantime, 4 of 4 reviews on this stock are to Buy, giving NMFC a Strong Buy analyst consensus rating. (See NMFC stock analysis on TipRanks)Summit Hotel Properties (INN)We’ll finish this list with Summit Hotel. A stock in the hospitality sector, in the midst of the coronavirus public health crisis? Yes, really. Summit, an REIT, owns 73 hotels in the US, and boasts over 10,000 rooms. The company’s properties are skewed toward upscale customers, who are less likely to be affected by a cash crunch, even in the current economy. And, Summit entered the current crisis with over $395 million in available credit.Even with those advantages, Summit’s shares are down 31% after the bears and bulls have had their way in the past three months. But the main result recent volatility has been to inflate the dividend yield. At 72 cents annualized, the company’s dividend gives a yield of 8.9%, 4.5x higher than the S&P average yield.Deutsche Bank analyst Chris Woronka is duly impressed by the company’s position. He writes of Summit, “[We] expect to see meaningful market share gains as INN leans into the power of the brand platforms and potentially benefits from demand that has been displaced from hotels' whose highly leveraged owners have had to suspend operations. INN has 27-28 months of liquidity… We view INN as a solid risk-adjusted way to gain exposure to lodging in the nascent stages of recovery.”In line with this bullish view, Woronka rates INN a Buy. (To watch Woronka’s track record, click here.)Wall Street is unanimous at INN shares, as 6 analysts have all given recent Buy ratings to the stock. INN’s recent gains have pushed it through the average target as well. The current trading price of $8.36 shows that the $7.67 average price target is simply obsolete. (See Summit stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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The U.S. planemaker said it handed over just four planes in May, down from six it delivered in April, its lowest total for the month in six decades and about 87% fewer than it delivered to customers at the same time a year ago. Deliveries are financially important to planemakers because airlines pay most of the purchase price when they actually receive the plane. Customers also canceled orders for another 18 planes last month, including 14 MAX jets that were the company’s top-selling plane until a pair of crashes just over a year ago.
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial […]
Yahoo Finance’s Emily McCormick joins The First Trade to discuss Vroom’s public offering. She also breaks down Tiffany’s recent rise in sales in Mainland China. This past Friday we got our first hint of the route our economic recovery from coronavirus may take – and the news was unequivocally good. Despite an uneven reopening, with some states all in and others continuing their lockdowns, the May jobs report showed the largest surge in employment in the survey’s history.As the recovery proceeds, investors have to find the right stocks to take advantage of the jump in the market. TipRanks has the data tools to bring clarity from the market conditions – especially the Smart Score tool. Building on eight separate factors, the Smart Score collates all the available data on a stock and distills it down to a single number. Some stocks – the best options out there – get the coveted ‘perfect 10.’ Using the Smart Score tool, we managed to pinpoint 3 stocks that currently present perfect investing opportunities — all receive a score of a “perfect 10.” Universal Technical Institute (UTI)The first “perfect 10” name on today’s list is Universal Technical Institute, a network of technical post-secondary schools and colleges throughout the US. Courses are offered in automotive repair, diesel/industrial technology, and collision repair. The school offers manufacturer specific training in marine and motorcycle mechanics, and partners with NASCAR.Earnings turned negative in Q1, even though revenues grew year-over-year. In Q2, reported last month, EPS came in at a 4-cent loss, again, while revenues grew. The Q2 top line, $82.7 million, beat the forecast and was up modestly from the year before.B. Riley FBR analyst Rajiv Sharma believes that UTI will see a fast turnaround once COVID-19 restrictions are eased. He writes, “the bevy of lower income jobs (retail, restaurants etc) that typically compete with a student’s stint at UTI, are now more likely to take longer to come back if not impacted severely. Soaring unemployment rates too, as shown from recessions in the past, are also expected to start causing a rise in student enrollments soon. Ongoing enrollments, seasonally slow during this period anyway, have not been out of the ordinary. UTI, for the first time, had several hundred enroll into their recently-launched online+workshop curriculum.”Sharma’s $11 price target on UTI implies a robust upside of 46%, and backs up his Buy rating. (To watch Sharma’s track record, click here)Overall, we’re looking at a stock with a unanimous Strong Buy analyst consensus rating. Wall Street has given UTI 4 thumbs up in recent weeks. The $9.50 average price target suggests room for 26% growth from the $7.51 share price. (See UTI stock analysis on TipRanks)InterDigital (IDCC)Next up is InterDigital, a technology R&D firm that specializes in wireless and video tech for mobile devices and networks. The company’s technologies are integral in streaming media, 5G, and virtual reality. As can be imagined, the current corona crisis – with its sudden surge in remote connection use and telecommuting work – has been an opportunity for InterDigital. IDCC’s first quarter earnings broke even, doing better than the Street had anticipated. On the top line, revenues of $76.2 million also beat the forecast and were substantially higher year-over-year. Roth Capital analyst Scott Searle sees a clear path forward for IDCC. He writes of the company, “With an attractive long-term model, strong balance sheet (~$13+ net cash/share) and defensible IP position, IDCC currently trades at 13x 2021 pro forma EPS (net of cash). We believe that the company has competently managed implementation and communication of accounting confusion around ASC 606 and expect the major contributor to the disparity (Huawei) to be rectified in 2019.”Searle’s rates IDCC a Buy and his $104 price target suggests an impressive upside of 76% for the coming year. (To watch Searle’s track record, click here)Overall, Wall Street agrees with Searle. IDCC has a unanimous Strong Buy analyst consensus rating, based on 3 recent reviews. Shares are priced at $58.51, and the $93.67 average price target implies a one-year upside of 60%. (See InterDigital stock analysis on TipRanks)Cirrus Logic (CRUS)Last on our list is a mid-cap player in the semiconductor chip industry. Cirrus is a fabless chipmaker; that is, the company designs and markets its chips, while outsourcing the manufacturing process. Cirrus’ chips are widely used in audio and voice reproduction systems. The company reported $1.28 billion in revenue for FY20, ending last month, and a solid financial position. Cirrus claims some $600 million in available cash and do outstanding debt – an enviable position for any company, but especially so during these difficult times.Still, despite the company’s strong performance, it has been impacted by the coronavirus and the economic shutdowns. Travel and trade restrictions have disrupted supply and distribution chains, as they have across the board. CRUS shares are down 11.3% from its pre-bear market levels.Ruben Roy, 5-star analyst with Benchmark, is optimistic about this stock, writing, “We continue to believe that as audio and voice technologies continue to proliferate, CRUS will remain amongst the biggest beneficiaries… with a growing portfolio of technologies and continued strength of customer relationships, we continue to expect CRUS to be well positioned as market trends improve.”Roy’s Buy rating is backed by a $95 price target that indicates his confidence in 39% upside growth for the coming year. (To watch Roy’s track record, click here)The analyst consensus rating on CRUS is a Moderate Buy, based on 3 Buys and 2 Holds set in the last couple of months. The shares have an $86 average price target, which suggests a 20% growth potential from the current $71.60 trading price. (See Cirrus Logic stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F […]
Diamond Hill Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The Diamond Hill Small Cap Fund posted a return of -36.17% for the quarter, underperforming its benchmark, the Russell 2000 Index which returned -30.61% in the same quarter. You should check out Diamond Hill Capital's top 5 […]
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F […]
Yahoo Finance’s Sibile Marcellus joins Heidi Chung to discuss the latest outlook for American Airlines amid the coronavirus. The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. […]