Raymond James: 2 big 7% dividend stocks to buy now
Looking at the markets with an eye on the main chances, Raymond James strategist Tavis McCourt sees both the risk and the opportunity in current market conditions. The timeliness, in his view, stems from obvious factors: Democrats won both Georgia Senate seats in the recent runoff, giving the new Biden administration majority support in both houses of Congress – and increasing the chances of significant budget support being signed. short term right. More importantly, the coronavirus vaccination program continues and reports show that Pfizer’s vaccine, one of two approved in the United States, is effective against the new strain of the virus. A successful vaccination program will accelerate economic recovery, allowing states to ease lockdown regulations – and get people back to work. The risks also come from the political and public health fields. House Democrats have passed articles of impeachment against President Trump, despite his impending natural end to his tenure, and this passage reduces the chances of political reconciliation in a highly polarized environment. And while the COVID strain matches current vaccines, there is still a risk that a new strain will develop that is not covered by existing vaccinations – which could reignite the cycle of lockdown and economic decline. Another risk McCourt sees, beyond these two, would be a sharp rise in inflation. He doesn’t rule this out, but considers it unlikely to happen anytime soon. “… Product / service inflation is only really a possibility AFTER reopenings, so the market feels a bit bulletproof in the very short term, and therefore the rally continues, with Dems winning GA races just adds fuel to the stimulus fire, ”noted McCourt. Some of McCourt’s colleagues among Raymond James analysts keep these risks in mind and put their imprimatur on solid dividend-paying stocks. We looked at recent calls from Raymond James and, using the TipRanks database, we picked two stocks with high dividend yields. These Buy-rated tickers bring a dividend yield of 7%, a strong pull for investors interested in using the current good times to set up a defensive firewall if the risks materialize. Enterprise Products Partners (EPD) We will start in the energy sector, an industry long known for its high cash flow and high dividends. Enterprise Products Partners is an intermediary company that is part of the network that transports hydrocarbon products from wellheads to tank farms, refineries and distribution points. Enterprise controls more than 50,000 miles of pipelines, shipping terminals on the Texas Gulf Coast, and storage facilities for 160 million barrels of oil and 14 billion cubic feet of natural gas. The company was affected by low prices and weak demand in 1H20, but partially recovered in the second half of the year. Revenue rebounded, increasing 27% sequentially to $ 6.9 billion in the third quarter. That number was down year-over-year, sliding 5.4%, but was more than 6% above the third-quarter forecast. Third quarter profit, at 48 cents per share, was slightly lower than expected, but was up 4% year-over-year and 2% sequentially. EPD recently declared its dividend payout for 4Q20 at 45 cents per common share. This is an increase from the previous payment of 44 cents, and it is the first increase in two years. At $ 1.80 annualized, the payout earns 7.9%. Among the bulls is Raymond James’s Justin Jenkins, who rates EPD as a strong buy. The analyst gives the stock a price target of $ 26, which implies a 15% rise from current levels. (To see Jenkins’ track record, click here) Supporting its bullish stance, Jenkins noted, “In our opinion, EPD’s unique combination of balance sheet strength and ROI remains best-in-class. . We consider that EPD is arguably the best placed. to withstand the volatility of the landscape… With the EPD footprint, demand gains, project growth and contracted ramps should more than offset supply headwinds and reduce marketing results y / y… ” It’s not often that analysts all agree on a stock, so when it does, take note. The EPD Strong Buy consensus rating is based on a 9 buy consensus. Average share price of $ 24.63 suggests a 9% rise from the current share price of $ 22.65. (See EPD stock market analysis on TipRanks) AT&T, Inc. (T) AT&T is one of the instantly recognizable stocks in the market. The company is a long-time member of the S&P 500 and has a reputation for being one of the top dividend payers in the stock market. AT&T is a real giant in the stock market. large-cap industry, with a market capitalization of $ 208 billion and the largest network of serv these mobile and landline telephony in the United States. Its acquisition of TimeWarner (now WarnerMedia), in a process that took place between 2016 and 2018, gave the company a significant stake in the mobile content streaming industry. AT&T saw its revenue and profits decline in 2020, under pressure from the corona pandemic – but the decline was modest, as that same pandemic also put a premium on telecommunications and network systems, which tended to support AT&T operations. Revenue in 3Q20 was $ 42.3 billion, 5% lower than the quarter a year ago. On positive notes, free cash flow increased year-over-year from $ 11.4 billion to $ 12.1 billion, and the company reported a net gain of 5.5 million new subscribers. The growth in subscriber numbers was driven by the new rollout of the 5G network – and by premium content services. The company maintained its reputation as a dividend champion and made its most recent declaration of dividend for payout in February 2021. The payout, at 52 per common share, is the fifth in a row at current levels and annualizes to $ 2.08 , which gives a yield of 7.2%. By comparison, the average dividend of comparable companies in the tech industry is only 0.9%. AT&T has maintained its strong dividend over the past 12 years. Raymond James analyst Frank Louthan views AT&T as a classic defensive value stock and describes T’s current state as “ built-in ” bad news. “[We] I think there is more that can go right over the next 12 months than what can get worse for AT&T. Add to that the fact that stocks are sold heavily short, and we think that’s a recipe on the rise. Large cap stocks are hard to come by, and we believe investors who can wait a few months for an average reversion while locking in a 7% return should be rewarded for buying AT&T at current levels, ” Louthan said. Based on these comments, Louthan rates T an outperformance (i.e. buy), and his price target of $ 32 suggests a growth margin of 10% from current levels. (To see Louthan’s report, click here) What does the rest of the street think? Looking at the breakdown of consensus, the opinions of other analysts are more dispersed. 7 buy reviews, 6 holds and 2 sells add up to a moderate buy consensus. Additionally, the average price target of $ 31.54 indicates upside potential of around 9%. (See AT&T Stock Analysis on TipRanks) To find great ideas for dividend-paying stocks traded at attractive valuations, visit the Best Stocks to Buy from TipRanks, a newly launched tool that brings together all of the information about TipRanks stocks. . Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.