Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 “Perfect 10” Dividend Stocks That Tick All The Boxes

By Investing Insights Stock MarketsMay 28, 2020 05:47AM ET
www.investing.com/analysis/3-perfect-10-dividend-stocks-that-tick-all-the-boxes-200525990
3 “Perfect 10” Dividend Stocks That Tick All The Boxes
By Investing Insights   |  May 28, 2020 05:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The S&P 500 has spent the month of May bouncing in the range between 2,800 and 3,000. While the index remains 11% below its all-time high, there is a cautious sense of optimism, that the worst of the bear market is behind us.

Investors may be feeling upbeat, and anticipating a recovery in 2H20, but times are still volatile. To make sense of them, Investing.com offers the InvestingInsights, a comprehensive tool that enables investors to access unique market insights based on Big Data. The platform uses sophisticated AI algorithms to generate a single score for each stock. Shown on a 1 to 10 scale, the Smart Score is based on analyst, blogger, and investor sentiment, and collective indicators such as hedge activity and insider trading.

Today, we’ll look at three high-yield dividend stocks that have earned a ‘perfect 10’ from the Smart Score. For investors seeking a clear forward path, the data shows that these are the picks most likely to bring solid returns. Each of these stocks combines its perfect Smart Score with a reliable dividend history, giving investors a secure income stream. Let’s dive in.

Bunge (NYSE:BG), Ltd. (BG)

First up is Bunge, an important company in the world’s food and agriculture food chain. The company specializes in oils and milled grains used by commercial brands and restaurants around the world. Bunge also deals in storage, transport, and processing of raw materials for end products in high-protein livestock feed. Other operations include corn, sugarcane, and wheat growing and processing.

Since we all need to eat, Bunge benefits from occupying an essential niche. Even so, the Coronavirus pandemic found ways to hit the company. The various lock-down and shutdown policies enacted globally in Q1 slowed restaurant and commercial food businesses almost to a halt. BG saw reported income swing from a $1.27 per share profit in Q4 to a $1.34 per share net loss in Q1. BG shares have underperformed in recent months, and are still down 31% from February levels.

Despite the earnings slide, Bunge’s management has chosen to maintain the company’s dividend – a dividend that has been paid out regularly since 2001. At 50 cents quarterly, the current payment annualizes to $2.00, and gives an impressive yield of 5.65%. This is almost triple the 2% average yield found among peer companies in the industrial good sector.

The Smart Score on BG shares gets its boost from the ‘sentiment’ factors. As may be expected in a difficult market environment, the technical and fundamental analysis factors are negative – but insiders have purchased $9.9 million worth of BG shares in recent months, and hedge fund activity has also increased. The professional stock watchers, both analysts and bloggers, are also strongly positive on this stock. These upbeat indicators outweigh the negatives in this case.

Bunge Smart Score
Bunge Smart Score

Covering BG shares for BMO Capital, 5-star analyst Kenneth Zaslow writes, “BG remains our “Top Pick” for 2020, as BG’s underlying business fundamentals relative to its value appear to be largely misunderstood… BG’s internal operational improvements, nimble risk management framework, and underlying fundamentals enable BG to maintain its Agribusiness outlook… Despite BG’s stock reaction, BG’s economic earnings reduction represents less than 5% on EBITDA (i.e., majority is non-cash) and likely is temporary.”

In line with his position that this stock has a fundamentally sound foundation, Zaslow gives it a Buy rating. His $72 price target indicates his confidence, suggesting a 91% upside in the coming year.

Wall Street is in general agreement that Bunge represents a buying opportunity. The Strong Buy analyst consensus rating is based on 4 reviews, including 3 Buys and a single Hold. Shares are priced at $35.53, while the average price target of $57.50 implies a health upside of 61%. (See Bunge stock analysis)

CVS Health (NYSE:CVS) Corporation (CVS)

Next up is a company you are likely familiar with. CVS is well-known for its pharmacy chain, an asset that has proven especially valuable in the current climate. Unlike most companies – and the overall market – which saw declines in Q1 2020, CVS actually reported a quarterly earnings sequential gain. While the company had been expected to show a decline to $1.62 per share, EPS was reported at $1.91. This was up 10% from Q4, and an even stronger 19% year-over-year. The demand for pharmacy goods and service should be obvious to all.

Solid earnings support a solid dividend. CVS is paying out 50 cents quarterly, or $2 per year, on each share. The company has kept its dividend payments reliable for the last 15 years, in good times or bad, adding to the dividend’s allure. The current yield is 3.2%, which beats the 2.5% average yield found among peers in the consumer goods sector.

The Smart Score for CVS includes favorable views from analysts and bloggers, and heavy purchase activity from insiders and hedges.

CVS Health Smart Score
Smart Score

A good example of the positive analyst sentiment comes from Credit Suisse (SIX:CSGN) analyst A.J. Rice. Rice has upgraded his stance on this stock, raising his view from Neutral to Buy. His $75 price target suggests room for a solid 17% upside this year.

Backing his view on CVS, Rice writes, “CVS’ Pharmacy Services Segment is Outperforming Expectations, as PBM Selling Season Shaping up Nicely. CVS is seeing an easing of rebate guarantee pressures which it saw peak in 2019, become less of a headwind in 2020, and are expected to be de minimis in 2021… CVS has remained on track-to-ahead of its synergies, modernization, and transformation initiatives, which could provide future upside.”

CVS shares have 13 recent reviews, breaking down to 10 Buys and 3 Holds and making the analyst consensus rating a Strong Buy. Shares are trading for $64.64, and the average price target of $79.50 implies a strong 23% upside potential for the stock over the next one year. (See CVS stock analysis)

Hudson Pacific Properties (NYSE:HPP) (HPP)

Last on our list is Hudson (NYSE:HUD) Pacific, a real estate investment trust, a type of company well-known for offering high-yield dividends. REITs operate by buying, managing, and leasing a range of residential and commercial properties, or by offering and investing in mortgages and mortgage-backed securities. HPP focuses on office space, in the lucrative Los Angeles, San Francisco, Seattle, and Vancouver markets. The company’s assets include 15 million square feet of leasable office space, located in prime high-tech development areas. Among Hudson’s clients are Alphabet (NASDAQ:GOOGL) and Netflix (NASDAQ:NFLX).

Q1 has been difficult for the REIT sector. With economic activity mainly shut down, business income streams have slowed to a trickle – which trickles down, as no income makes expenses, like rent, hard to meet. HPP reported EPS of 54 cents in Q1, down 2% from Q4, and Q2 is forecast at 50 cents. The company has maintained its dividend during the downturn – but this is no surprise, as the payout ratio is only 46% and REITs are required by tax code to return a high proportion of profits directly to shareholders. The 25-cent quarterly dividend represents a yield of 4.7%, more than double that found among peer companies.

Hudson shares many of the same Smart Score advantages as Bunge, above. Analyst and blogger sentiment are both positive, and hedge and insider purchases are both increasing. While most of the technical and fundamentals are in the red, one of them – asset growth – is highly positive. Asset growth is up 6.39% over the past 12 months. All of this adds up to a perfect 10 on the Smart Score.

Hudson Pacific Properties Smart Score
Hudson Pacific Properties Smart Score

Piper Sandler (NYSE:PIPR) analyst Alexander Goldfarb is deeply impressed by HPP’s potential looking forward. He sees the company as uniquely well-positioned to benefit as the economy reopens: “We are even more bulled up by the prospects of increased demand for HPP’s studio and media-oriented assets coupled with its ability to re-imagine space for the gaming and entertainment industries. HPP stands alone in its material exposure to these industries (17% ABR to media and entertainment), which have a pressing need to return to production for new content in the wake of the binge consumption occurring during COVID… With talent hesitant to travel, car-loving LA makes HPP well positioned to not only re-open soon but also with the office product in high demand.”

Goldfarb puts a Buy rating on HPP, and his $28 price target implies a healthy upside potential of 21% for the coming 12 months.

The Street’s consensus on HPP is a Strong Buy, based on 5 Buy ratings and 1 Hold set in recent weeks. Hudson’s shares are selling for $23.14, and the average price target is slightly more bullish than Goldfarb’s; at $28.20, it indicates a 22% upside potential. (See HPP stock analysis)

To find more ideas for stocks trading at attractive valuations, visit InvestingInsights.

3 “Perfect 10” Dividend Stocks That Tick All The Boxes
 

Related Articles

3 “Perfect 10” Dividend Stocks That Tick All The Boxes

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Habanero Peppers
Habanero Peppers May 31, 2020 1:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Entities are now writing articles.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email