3 large dividend shares, giving at least 8%; Wales Fargo says “Buy”
With the Georgian election behind us and the Trump administration coming out, the near-medium-term political landscape is becoming clearer: The Biden administration will be able to take care of its progressive base, now that it relies on majorities – but thin ̵
1; and in the two chambers of Congress. Predictability is good for the markets and we will probably have it at least until 2022, which makes this time locked in security portfolios. Wells Fargo analysts are looking for markets for the “right” buy and carry their picks more closely. They eavesdrop on high-yield dividend payers as an investment game of choice. The TipRanks database sheds a little more light on three of the company’s offerings – stocks with dividends yielding 8% or better. Apolo Investment Corporation (AINV) A good place to look for high return dividends is among the business development companies in the market. These companies offer special financing for the mid-market, providing credit and financing for clients from small to medium-sized businesses who would otherwise have difficulty accessing the capital markets. A typical example is Apolo Investment with an investment portfolio worth $ 2.59 billion. Apollo has investments in 147 companies with an average exposure of $ 15.9 million. The bulk of its portfolio, 86%, is initially secured debt. Healthcare, business services, aviation and transport, as well as high-tech companies make up more than half of Apollo’s investment goals. In Q3CY20 (the company’s fiscal Q2 of 2021), Apollo posted an EPS of 43 cents per share, equal consistently but by 18% year after year. The company boasted $ 268 million in available liquid assets and $ 287 million in available loan at its secured facility at the end of the quarter. Since then, Apollo has changed its revolving credit mechanism, extending its maturity until December 2025. In terms of dividends, Apollo has maintained its payments to ordinary shareholders despite the crown pandemic. Apollo’s last payment, in November, was a 31-cent regular dividend plus a 5-cent special dividend. The current yield is an impressive 11.6%. AINV coverage for Well Fargo, analyst Finian O’Shea notes, “Legacy’s impact has diminished, adding only $ 3 million to the top line this quarter, for an annual FV yield of ~ 5.5%. We believe that there is a very small shortcoming of NOI from the inherited book and we consider any conversions and redistributions as a big positive result for the shares. “O’Shea gives Apollo an overweight rating (ie purchase) and a price price that, at $ 12.50, suggests 12% up from current levels. (To view O’Shea’s record, click here) Overall, Apollo has two recorded reviews and they are split – 1 Buy and 1 Hold – for a moderate consensus view. The stock sold for $ 11.17, and its average price of $ 11.50 suggests a modest 3% up. (See TipRanks AINV stock analysis) Goldman Sachs BDC (GSBD) Then Goldman Sachs BDS is the banking giant’s entry into the special finance business development segment. GSBD is a subsidiary of Goldman and focuses on mid-market companies, providing closed-end investment services and access to mid-market credit. GSBD’s stock performance in 2020 showed a steady rebound from the initial recession caused by the coronary crisis last winter. By the end of the year, the shares had been trading at their levels since January 2020. In November, the company felt confident enough to offer $ 500 million in unsecured banknotes, at an interest rate of 2.875% and due in January 2026. The funds raised will be used to repay the revolving credit facility, improving interest on existing debt. Also in November, GSBD reported 80 cents EPS for the quarter ending September 30. The gains were strong enough to support a solid dividend of 45 cents per share – and the company announced a special dividend payment of 15 cents, which will be paid in three installments in 2021. Currently, the regular dividend has an income of over 9%. Among the bulls is Finian O’Shea from Wells Fargo, which also covers AINV. The analyst wrote, “[We] we believe that the high-quality investment platform and the shareholder-friendly structure will continue to stimulate attractive returns … GSBD is quality at a good price … For those who buy BDC, GSBD will probably always be in the portfolio discussion as we see it, given the quality of revenues and the orientation of shareholders. With that in mind, O’Shea rates GSBD overweight (ie, buying), along with a price tag of $ 19.50. This figure suggests 5% up from current levels. (To watch O’Shea’s record, click here) Once again, this is an action with an even division between buy and hold reviews, which makes the analyst rating a consensus for moderate buying. The stock is priced at $ 18.59, and the average price of $ 19.50 corresponds to O’Shea. (See GSBD stock analysis for TipRanks) ExxonMobil (XOM) From BDC we will move to the oil industry. Exxon Mobil is one of Big Oil’s players, with a market capitalization of $ 190 billion and revenue for 2019 (the last year for which data are available for the full year) of $ 264.9 billion. The company produces approximately 2.3 billion barrels of oil equivalent per day, which puts it in the top 5 of the world’s hydrocarbon producers. Low prices in 2H19 and the coronary crisis in 1H20 cut revenue in the first half of last year – but that turned in Q3, when XOM reported $ 45.7 billion at the top. Although it decreased during the year, it increased consistently by 40%. Despite all the opposing winds facing the oil industry over the past 18 months, XOM kept its dividend reliable and paid the last distribution in December 2020. This payment was 87 cents per ordinary share, up to $ 3.48 per year and yielding 8.4 %. In a note to major oil companies, Roger Reed of Wells Fargo wrote: “We expect more favorable macro-blows in 2021, but we realize that there are significant challenges and keep the average price of Brent below $ 50 …” Turning his eyes in particular to XOM, the analyst adds: “We do not expect production growth and only minimal free cash flow generation, which includes disposal revenues. However, this represents a significant change in the last few years of significant cash burns and increased leverage. In our opinion, this is probably enough to raise stocks a little higher and reduce concerns about the sustainability of dividends. “In light of its comments, Read Rates XOM shares overweight (ie buying) and its $ 53 price tag shows room for 17% growth up next year. (To view the Read’s record, click here) The fact that Wall Street is still looking at the energy industry with caution is clear from the consensus rating of XOM-Hold analysts. This is based on 10 reviews, including 3 purchases, 6 retentions and 1 sale. The shares are selling for $ 45.15, and their target for an average price of $ 47.33 suggests a moderate increase of ~ 5% (see XOM analysis of TipRanks shares). To find good ideas for dividend stocks trading at attractive ratings, visit TipRanks’ Best Stocks Buy, a newly created tool that brings together all insights into TipRanks ownership. Disclaimer: The views expressed in this article are those of the analysts only. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.