Are you aiming for at least a 9% dividend yield? Analysts recommend buying 2 dividend stocks

Dividend stocks are the Swiss army knives of the stock market.

When dividend stocks go up, you make money. If they don’t go up, you’re still making money (from the dividend). Hell, even when a dividend stock falls in price, it’s not all bad news, because the more the stock’s price falls, the higher the dividend yield (the absolute dividend amount divided by the stock price).

Knowing all of this, wouldn’t you love to find great dividend stocks? Of course you would.

Wall Street analysts have chimed in – and they’re recommending two high-yield bonds Dividend Stocks for investors looking for protection for their portfolio. These are stocks with a specific set of clear attributes: a dividend yield of at least 9% and buy ratings. Let’s take a closer look.

Blackstone Secured Lending (BXSL)

We start with Blackstone Secured Lending, a business development company (BDC) under the auspices of the larger asset management company Blackstone. BXSL operates in the financial services sector, providing US private companies with access to capital and credit. BXSL’s portfolio consists primarily – almost 98% – of senior secured loans; The remainder is largely accounted for by participations. Overall, the portfolio was valued at $9.6 billion as of December 31, 2022, and more than 99% of the debt investments are floating rate.

The overall quality of the company’s portfolio can be seen in the fourth quarter ’22 financial results. Blackstone Secured Lending reported net investment income of 90 cents per share, up 13% sequentially and an even stronger 34% year over year. The Q4 result was above the 88-cent forecast and marked the third consecutive quarterly profit.

However, dividend investors will be more interested in the company’s Feb. 27 payment statement. BXSL increased its regular common stock dividend by 17% to a new payment of 70 cents. This was the third consecutive quarter that the dividend was increased. The 70 cent div is due to be paid out next April 27; At an annualized rate of $2.80, the dividend yields a strong 11.3%. That’s more than five times the average dividend yield of S&P-listed companies and 5.3 points higher than inflation.

The bulls include Compass Point 5-star analyst Casey Alexander, who notes that the company’s strategy is well aligned with the current interest rate regime and that it is well positioned to return capital to shareholders.

“We have indicated that we believe BXSL has the best combination of attributes for investing in a BDC in the current economic climate. BXSL is among the BDCs where the NII is most leveraged to higher interest rates. We calculate that BDC has returned 9.5% based on YE2021 NAV in 2022. Given the volatility of the private debt markets and rapidly changing interest rates, this is an excellent achievement,” said Alexander.

“Additionally,” the analyst added, “we’ve seen BXSL repurchase more than $250 million of stock throughout 2022 and announced an additional $250 million share repurchase program.” We’ve always said that in order to earn the right to withdraw capital from the market, you must be willing to return it when your shares are trading at a discount, and BXSL has met that requirement to the highest degree.”

Following his upbeat comment, Alexander gives BXSL a buy rating, and his price target of $29 implies a 16% one-year upside potential for the stock. Based on the current dividend yield and expected share price increase, the stock has a potential total return profile of ~27%. (To see Alexander’s track record, Click here)

Overall, BXSL stocks have a consensus rating of Moderate Buy from Wall Street analysts based on 9 recent analyst reviews, including 6 buys and 3 holds. (See BXSL Stock Forecast)

Westlake Chemical Partners (WLKP)

Next is Westlake Chemical Partners, a limited partnership formed by Westlake Chemical Corporation in 2014 to operate its ethylene business. The Company’s business involves the production and sale of ethylene and by-products such as propylene, butadiene and hydrogen, which are mainly used in the manufacture of various plastics and other chemical products.

WLKP manufacturing facilities are located in Calvert City, Kentucky and Lake Charles, Louisiana. In addition to these assets, the Company also operates a 200-mile ethylene pipeline system connecting its manufacturing facilities to key markets in the Gulf Coast region, including Houston, Texas. The company has an annual production capacity of 3.7 billion pounds.

The company’s results late last year – 4Q22 – were mixed disappointing. Revenue of $3.29 billion fell 6.3% year over year while missing the consensus estimate of $3.41 billion. Additionally, the company’s GAAP EPS of $1.79 was down 64% year over year, missing the consensus estimate of $2.38. The company partially attributed lower fourth quarter ’22 revenue to higher interest expense.

Despite weak sales and earnings, WLKP has shown a solid increase in cash flow over the past year. Total cash flow from operations in Q4 22 was $122.6 million, which compares very favorably to the total of $21.9 million in the year-ago quarter. And of particular interest to dividend investors, distributable cash flow for the fourth quarter of ’22 is listed at $20.3 million — $5 million up from the $15.3 million reported in the prior-year period.

The distributable cash flow supports the company’s dividend payment, which was last declared at 47 cents per common share. The payment was made on February 16 of this year. Westlake has kept its dividend at this level since early 2020 and has maintained a reliable quarterly dividend payment since 2014. The annualized rate of the current payment of $1.88 per common share yields a 9% yield.

This stock has caught the eye of Deutsche Bank’s 5-Star Analyst, David Companion, who makes a case for going bullish here due to the potential for future capital gains appreciation and current risk mitigation.

“We remain confident that WLKP will continue to provide a distinctive investment opportunity that differs from other MLPs due to its: i) stable cash flows insulated from commodity price risk; ii) strong balance sheet, underpinned by prudent management of cash and leverage metrics; and iii) strategic alignment with its investment-grade parent company,” said Associate.

To that end, the Deutsche Bank analyst has a Buy rating on WKLP shares along with a price target of $28, suggesting upside potential of 31% over the one-year time horizon. (To see Companion’s track record, Click here)

WKLP appears to be flying under the road’s radar, and as of this writing, Deutsche Bank is the only current review known to exist. (See WLKP stock forecast)

To find great stock trading ideas at attractive valuations visit TipRanks’ The best stocks to buya tool that brings together all of TipRanks’ stock insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important that you do your own analysis before making any investment.

Source :

Leave a Reply

Your email address will not be published. Required fields are marked *