The S&P 500 has broken above 3,000, marking a milestone in the current bull rally. There’s a deepening feeling that equities by be a leading indicator, showing that the economy will turn around in 2H20.That’s the blue-sky scenario, and it may happen. We live in an uncertain world, however, and even the most upbeat investors will look for ways to defend their portfolio in times like these. It’s natural to look at value stocks, equities trading at low cost but offering high upside potential, and high-yield dividend stocks, with their steady income stream providing a cushion against share depreciation. We’ve used TipRanks database to find three stocks to fit that profile. Ares Commercial Real Estate (ACRE)We’ll start with a real estate investment trust. These companies typically pay out high yield dividends, as tax codes require them to return a high percentage of income directly to shareholders. Ares, which originates, invests in, and manages commercial real estate loans in the mid-market, is typical of its niche.The economic and market slides of the past few months hit the company hard. With commercial activity slowing, there were fewer opportunities for real estate loans, and repayment income was hit. Ares saw a sequential decline in earnings from Q4 to Q1, although at 11% it was not as deep as many similar companies. The company’s stock price is still down, however; with a net share price loss of 50%, Ares has badly underperformed in the current cycle.Even though the stock is down and income is lower, Ares has maintained its solid dividend. The company paid out 33 cents per share in Q1, slightly more than its EPS. The yield, however, is the true attraction here – at 16.5%, it is sky-high, far higher than the 2.2% average found among peer companies in the financial sector.JMP’s 5-star analyst Steven DeLaney sees ACRE’s current condition as an opportunity to buy in at lower prices. He writes of the stock, “…our outlook for a recovery in the value of ACRE shares remains positive after an expected few months of temporary economic turbulence as the company has minimal exposure to higher-risk commercial property types and has generally demonstrated solid loan underwriting since its inception in 2012.”DeLaney’s Buy rating is backed by a $10 price target, suggesting room for a robust upside of 32%. (To watch DeLaney’s track record, click here)Ares has a unanimous Strong Buy analyst consensus rating, based on 3 recent Buy reviews. Shares are selling for $7.61 and the average price target matches DeLaney’s at $10. The 31% upside and ultra-high dividend yield should bring investors in. (See ACRE stock analysis on TipRanks)Barings BDC, Inc. (BBDC)Next up is a business development corporation, Barings BDC. This company, provides asset management and direct origination for its customers to raise capital. Barings invests in middle market debts, equities, and fixed income assets, with customers around the world. Barings boasts over $327 billion in world-wide assets under management.In Q1, Barings managed to avoid sharp sequential declines, but the 15-cent EPS still missed the forecast by a penny. Top line revenue, at $18.7 million missed the forecast by almost 2%; however, it did show modest year-over-year growth.BBDC pays out 16 cents per share quarterly, making the yield on the 64-cent annualized payment an impressive 9%. While not as stellar as Ares above, it is still more than 4x higher than the average 2% yield found among S&P listed companies.Finian O’Shea covers this stock for Wells Fargo and writes, “With a stable portfolio, leverage and liquidity profile, we believe BBDC is one of the names that will sail through the recession with comparatively little harm – and therefore likely to provide a very attractive return over the medium to long term.” (To watch O’Shea’s track record, click here)The Strong Buy analyst consensus rating here is another unanimous vote, also based on 3 reviews. BBDC is selling for $7.40 per share, and the average price target of $8.50 indicates room for a 10% upside potential. (See Barings BDC stock analysis on TipRanks)Ready Capital Corporation (RC)Last up is another REIT, this one focusing on commercial mortgages. Ready Capital buys, originates, finances, and manages loans for commercial mortgages and related real estate securities including multi-family properties. The company’s customer base is in the US, where it boasts that it has provided over $3 billion in capital through its services.Ready suffered the worst share price loss of the stocks in this list, as it is down 59% since February. Shares have been flat since their initial decline, and the first quarter saw earnings collapse from over 40 cents to just one penny.However – the prospect for Q2 is better, with forecasts predicting up to 52 cents EPS inQ2. Most investors appear to see Ready’s pain as already baked in – repayments were down, but as the economy improves that situation is likely to reverse itself. In the meantime, Ready has kept up its dividend at 40 cents quarterly. The annualized payment is $1.60 per share. These are decent numbers, but the yield is where it’s at here. RC’s dividend yields an eye-popping 25% after the share declines – more than enough to make the potential risks worthwhile.Piper Sandler analyst Crispin Love writes, “We believe RC can weather the volatility given its diversified platform, low LTVs, PPP benefits, and potential to buy distressed assets in 2020/2021… The company's $4.2B portfolio of 4,500 loans have LTVs of about 60% and 90% of loans are current through April 30. In the CRE portfolio, 10% of loans are in forbearance while 7% of loans in the resi portfolio are in forbearance. Given RC's focus on small balance, we believe there were worries that forbearance rates would be significantly higher.”All of this is a recipe for a stock ready to bounce back, and Love rates RC a Buy. The analyst’s $17.50 price target shows how strong his confidence is – it implies an upside potential of 195% for the coming year. (To watch Love’s track record, click here)While RC shares get another Strong Buy from the analyst consensus, also based on 3 Buy reviews, there is some caution here, shown by one Hold tossed into the mix. Ready’s shares are selling for $5.92, and the average price target of $13.50 suggests a strong upside of 128%. (See Ready 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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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out […]
(Bloomberg) — U.S. stocks erased losses and traded little changed after President Donald Trump stopped short of implementing draconian economic restrictions against China even as he blasted the country for its actions on the pandemic and in Hong Kong.The S&P 500 looked to end May on an up note as it caps a second monthly advance. Equities turned higher after Trump announced retaliation against China by withdrawing from the World Health Organization. He said his administration will look into eliminating policies that give Hong Kong preferential treatment. The president did not institute sanctions on Chinese officials as was anticipated.“Nothing on changing trade deal or anything else with teeth. Looking into actions, might do something in the future, but markets won’t worry about that now. He also stuck to script and hit many of the logical things people are upset with China about” said Dennis DeBusschere, a strategist at Evercore ISIStocks have gained more than 4% in May, buoyed by signs the economy is stirring after shutting down in April. But a flurry of negative headlines weighed on sentiment earlier in the day. U.S. consumer spending, which accounts for about two-thirds of the world’s largest economy, plunged a record 13.6% in April after the coronavirus pandemic halted purchases of all but the most essential goods and services.Meanwhile, the president is escalating a confrontation with Twitter Inc. that threatens to damage social-media platform operators. Trump is also weighing in on political unrest in the Midwest, where protests against police violence have turned unruly. Chairman Jerome Powell said the Federal Reserve’s main street lending program will start soon.“I’m very cautious on my medium and even long-term outlook for the markets,” Kate Jaquet, a portfolio manager at Seafarer Capital Partners LLC, said on Bloomberg TV. “I perceive there to be a very large disconnect between stock-market valuations across the globe and underlying company fundamentals.”The Stoxx 600 Index declined for the first time in five days, dragged lower by travel shares and automakers. The euro extended gains after the region’s inflation rate fell to the lowest in four years, adding to reasons for authorities to expand monetary stimulus.Iron ore surged past $100 a ton as supply woes in Brazil coincide with sustained, robust demand in top steel producer China. Crude oil trimmed its biggest monthly advance on record.These are some of the main market moves:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
In this article you are going to find out whether hedge funds think Southwest Airlines Co. (NYSE:LUV) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks […]
(Bloomberg) — Occidental Petroleum Corp. cut its quarterly dividend by 91% to the lowest since at least the 1970s amid the pandemic-driven collapse in energy demand that has strained the oil explorer’s ability to shoulder its debt.Occidental shareholders will receive a penny per share on July 15, the Houston-based company said in a statement Friday. The company has been reeling in dividends since March, when it trimmed the payout to 11 cents from 79 cents.The surprise cut came the same day Chief Executive Vicki Hollub and the rest of the board of directors won re-election at Occidental’s annual shareholders’ meeting. The dividend move will save the company about $360 million a year.Hollub has weathered extreme pressure from shareholders ever since outbidding Chevron Corp. to win the purchase of Anadarko Petroleum Corp. last year. The deal saddled Occidental with some $40 billion of debt that was looking hard to pay off even before Covid-19 wiped out global oil demand, sending crude prices to record lows.The company has gone from being a steady, diversified oil producer to a debt-laden, shale-focused driller that now has a market value of just $12.3 billion, less than a third of the price it paid for Anadarko. Its credit rating was downgraded to junk in March. Hollub fended off a shareholder revolt by making peace with the company’s second-largest shareholder, billionaire Carl Icahn, ending a nine-month public battle that included personal barbs against the CEO. However, it came at a cost. Hollub and her fellow directors agreed to cede some control by putting nominees of the activist investor on the board.(Updates with directors’ re-election in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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 […]
The company’s U.S.-listed shares fell over 13% in premarket trading and dragged down other stocks in the industry between 2% and 5%. Medical cannabis was the only bright spot, while Canopy’s revenue from recreational markets at home in Canada and internationally slumped in double-digit percentages. Ontario-based Canopy Growth’s net loss attributable to the company widened to C$1.30 billion ($946.21 million), or C$3.72 per share, in the quarter ended March 31, from C$379.5 million, or C$1.10 per share, a year ago.
Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Emily McCormick discuss the AT&T-Salesforce deal, and Salesforce’s latest earnings report.At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each […]
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 […]