TipRanks
2 Big Dividend Stocks Yielding 7%; Analysts Say ‘Buy’
Let’s talk about defending your portfolio. It’s a common impulse for most investors, when the economy starts to turn sour. We’re in a growth phase now, with economic activity rebounding strongly from the corona-crisis shutdowns, and with reopening getting into full stride, economists are predicting up to 8% GDP expansion this year. But there are clouds on the horizon. Inflation is rising, and the April jobs report was, simply put, a disaster. The Biden Administration is pushing multi-trillion dollar spending plans that are likely to boost inflation, while the expanded unemployment benefits are giving the unemployment rate an artificial boost. But with all that, the Federal Reserve has signaled that it does not intend to raise interest rates. Writing from investment banking firm Canaccord, analyst Tony Dwyer acknowledges the unsettled market conditions. “Although the major market indices remain near record levels, there has been incredible volatility underneath due to confusion around the path of inflation and the Federal Reserve insistence it is transitory. We fully expect the rotational volatility to continue over the coming weeks, with investors debating the outlook for inflation ahead of the newest economic data in early June as the Fed goes into their quiet period ahead of the June 15-16 FOMC meeting,” Dwyer noted. All of this adds up to a market environment that lends itself to defensive stock plays, as a hedge against uncertainty. And that, of course, brings us to dividend stocks. These are the classic defensive plays, giving investors a dual path toward returns, from both the share appreciation and the dividend payments. Wall Street’s analysts have been doing some of the footwork for us, pinpointing dividend-paying stocks that have kept up high yields, at least 7% to be exact. Opening up the TipRanks database, we examine the details behind two such stocks to find out what else makes them compelling buys. Black Stone Minerals (BSM) We’ll start with a hydrocarbon exploration and development company, Black Stone Minerals. This company holds rights to more than 20 million acres, spread across 60 productive basins in 40 states. The lion’s share of the operations are spread from Texas through Alabama, but Black Stone also has rights and hydrocarbon production in Montana and North Dakota, West Virginia and Pennsylvania, and the Rocky Mountain states. Black Stone reported its financial results for 1Q21 in early May. The results showed that the company has still not fully bounced back from the COVID pandemic – revenues and earnings are both still down year-over-year. On a positive note, revenues have shown three consecutive quarters of sequential increases. The top line came in at $87.1 million, and net income was reported at $16 million. The company reaffirmed its…
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