3 Big Dividend Stocks Yielding at Least 10%; Analysts Say ‘Buy’, , on November 13, 2020 at 7:11 pm

By ILP
On 11/13/2020
In Financial News
Tags:

Markets continued their upward trend this week, gaining ground since the November 3 vote. There is an optimistic view that politics will settle into a more normal pattern with a new Administration. Even so, investors have been wary this past autumn – as there is plenty to be wary about. The coronavirus has started a comeback with the advent of cooler weather, and the political uncertainty that surrounded the election has left the status of further economic stimulus packages in limbo.It’s times like these that investors start taking a renewed interest in dividend stocks. These are the classic defensive stocks, and for good reason: a reliable dividend keeps the income flowing, no matter what the markets do. Wall Street analysts have chimed in – and they are recommending high-yield dividend stocks for investors looking to find protection for their portfolio. Here, we’ll take a look at three stocks that fit a profile: a Strong Buy rating from the analyst community, and a dividend yield that gives at least 10%.Stellus Capital (SCM)Stellus Capital offers capital solutions (read: debt financing) for companies in the lower mid-market range. These are companies that may have difficulty accessing capital through large banks; Stellus shoulders the higher risk as an investment opportunity. The capital company’s portfolio includes 67 companies, $1.6 billion in assets under management, and over $6 billion in total funds invested.Stellus has been raising its dividend payment this year. The next dividend has already been declared for December, and shows an effective increase to 31 cents per common share. This comes from combining the regular 25 cent payment with a special 6-cent dividend, and after the company paid out 25 cents per share in the previous two quarters. Counting the regular dividend, the payment annualizes to $1 per common share, and gives a yield of 10.91%.Writing from Raymond James, analyst Robert Dodd says, “Core earnings covered the base dividend in 3Q20, and a strong spillover position should cushion the dividend in 2021. We continue to view the risk /reward attractively.”The analyst added, “The SCM pipeline looks robust, with ~10 portfolio companies going through various stages of due diligence. Repayments in 4Q20 could be as high as $30M – with a modest positive impact to NAV from exits above fair value marks at 3Q20.”To this end, Dodd rates SCM shares an Outperform (i.e. Buy) along with a $11 price target. This figure implies a 17% upside from current levels. (To watch Dodd’s track record, click here)Overall, Stellus’ Strong Buy analyst consensus rating is based on 4 reviews, including 3 Buys and 1 Hold. The stock is selling for $9.43 and its average price target of $10.17 suggests it has a one-year upside potential of ~8%. (See SCM stock analysis on TipRanks)WhiteHorse Finance (WHF)Next up is WhiteHorse Finance, another BDC. WhiteHorse’s focus is on small-cap companies, valued at $50 million to $350 million, and WHF’s investments are typically in the $10 million to $50 million range. WhiteHorse’s portfolio totals more than $595 million.A better outlook for the future, based on earnings recovery, has given a firm foundation to dividend payments, and WhiteHorse has kept up its 35.5 cents regular dividend. Combined with a 12.5 cent special dividend, this makes the most recent payment 48 cents per common share. The yield is a sky-high 12.29%.Oppenheimer analyst Chris Kotowski is upbeat about WhiteHorse, noting “WHF reported 3Q20 core net investment income (NII) of $0.38/share versus our $0.32 estimate and consensus’ $0.29E. The bottom line was boosted by an interest recovery, but what encouraged us most was both growth and improvement in asset quality. $58.3M of funding activity was only partially offset by only $26.5M of repayments, driving ~8.8% linked-quarter growth in investments alongside mark appreciation.”The 5-star analyst added, “Management seemed optimistic about the outlook for loan growth, saying that it was perhaps the best environment they had seen since 2012–2013, and they clearly have the capacity to put capital to work. The current gross leverage of 0.94x (and net 0.87x) sits below management’s 1.00–1.25x target leverage, leaving ample room for growth in coming quarters amidst a strong investment pipeline.”As a result, Kotowski gives the stock an Outperform (i.e. Buy) rating, and his $15 price target implies a robust 29% upside for the year ahead. (To watch Kotowski’s track record, click here)Overall, WhiteHorse has a unanimous Strong Buy analyst consensus rating, with 3 buy-side reviews on record. The stock is currently priced at $11.65 and its $13.25 average price target suggests it has a one-year upside of 14%. (See WHF stock analysis on TipRanks)Capital Southwest Corporation (CSWC)Last but not least is Capital Southwest, another Texas-based company in the business development sector. CSWC focuses on lending and credit options for mid-market companies. Capital Southwest boasts a portfolio featuring $664 million invested into 69 companies, and has over $150 million in liquidity available.Revenues have been recovering since going negative in Q1, at the height of the corona crisis. Sequential gains in both Q1 and Q2 have brought quarterly revenues to $21 million, while earnings in Q3 showed a strong spike to 45 cents per share, the highest value in over two years.Rising earnings have allowed Capital Southwest to keep up its history of reliable dividend payments. The company raised its dividend going into 2020, and has maintained the 51-cent payment all year. The 10.5% yield is more than 4x higher than the average found among financial sector peer companies, bringing CSWC to the attention of dividend investors.Among CSWC’s fans is JMP analyst Devin Ryan, who rates the stock a Buy and gives it a $17 price target. (To watch Ryan’s track record, click here)”Overall, we think results for the quarter were strong and that Capital Southwest is one of the most attractive ways to gain exposure to lower-middle-market direct originations. We highlight improving credit quality, strong portfolio growth, a solid pipeline of deal flow, sustainable core/supplemental dividends and management’s focus on expenses as reasons we think the stock is positioned to outperform,” Ryan opined.All in all, CSWC has a Strong Buy rating from the analyst consensus, with 3 recent Buy reviews and 1 Hold. Shares have an average price target of $15.67, which is almost flat compared to the current trading price. The real return here is in the dividend. (See CSWC stock analysis at TipRanks),

3 Big Dividend Stocks Yielding at Least 10%; Analysts Say ‘Buy’Markets continued their upward trend this week, gaining ground since the November 3 vote. There is an optimistic view that politics will settle into a more normal pattern with a new Administration. Even so, investors have been wary this past autumn – as there is plenty to be wary about. The coronavirus has started a comeback with the advent of cooler weather, and the political uncertainty that surrounded the election has left the status of further economic stimulus packages in limbo.It’s times like these that investors start taking a renewed interest in dividend stocks. These are the classic defensive stocks, and for good reason: a reliable dividend keeps the income flowing, no matter what the markets do. Wall Street analysts have chimed in – and they are recommending high-yield dividend stocks for investors looking to find protection for their portfolio. Here, we’ll take a look at three stocks that fit a profile: a Strong Buy rating from the analyst community, and a dividend yield that gives at least 10%.Stellus Capital (SCM)Stellus Capital offers capital solutions (read: debt financing) for companies in the lower mid-market range. These are companies that may have difficulty accessing capital through large banks; Stellus shoulders the higher risk as an investment opportunity. The capital company’s portfolio includes 67 companies, $1.6 billion in assets under management, and over $6 billion in total funds invested.Stellus has been raising its dividend payment this year. The next dividend has already been declared for December, and shows an effective increase to 31 cents per common share. This comes from combining the regular 25 cent payment with a special 6-cent dividend, and after the company paid out 25 cents per share in the previous two quarters. Counting the regular dividend, the payment annualizes to $1 per common share, and gives a yield of 10.91%.Writing from Raymond James, analyst Robert Dodd says, “Core earnings covered the base dividend in 3Q20, and a strong spillover position should cushion the dividend in 2021. We continue to view the risk /reward attractively.”The analyst added, “The SCM pipeline looks robust, with ~10 portfolio companies going through various stages of due diligence. Repayments in 4Q20 could be as high as $30M – with a modest positive impact to NAV from exits above fair value marks at 3Q20.”To this end, Dodd rates SCM shares an Outperform (i.e. Buy) along with a $11 price target. This figure implies a 17% upside from current levels. (To watch Dodd’s track record, click here)Overall, Stellus’ Strong Buy analyst consensus rating is based on 4 reviews, including 3 Buys and 1 Hold. The stock is selling for $9.43 and its average price target of $10.17 suggests it has a one-year upside potential of ~8%. (See SCM stock analysis on TipRanks)WhiteHorse Finance (WHF)Next up is WhiteHorse Finance, another BDC. WhiteHorse’s focus is on small-cap companies, valued at $50 million to $350 million, and WHF’s investments are typically in the $10 million to $50 million range. WhiteHorse’s portfolio totals more than $595 million.A better outlook for the future, based on earnings recovery, has given a firm foundation to dividend payments, and WhiteHorse has kept up its 35.5 cents regular dividend. Combined with a 12.5 cent special dividend, this makes the most recent payment 48 cents per common share. The yield is a sky-high 12.29%.Oppenheimer analyst Chris Kotowski is upbeat about WhiteHorse, noting “WHF reported 3Q20 core net investment income (NII) of $0.38/share versus our $0.32 estimate and consensus’ $0.29E. The bottom line was boosted by an interest recovery, but what encouraged us most was both growth and improvement in asset quality. $58.3M of funding activity was only partially offset by only $26.5M of repayments, driving ~8.8% linked-quarter growth in investments alongside mark appreciation.”The 5-star analyst added, “Management seemed optimistic about the outlook for loan growth, saying that it was perhaps the best environment they had seen since 2012–2013, and they clearly have the capacity to put capital to work. The current gross leverage of 0.94x (and net 0.87x) sits below management’s 1.00–1.25x target leverage, leaving ample room for growth in coming quarters amidst a strong investment pipeline.”As a result, Kotowski gives the stock an Outperform (i.e. Buy) rating, and his $15 price target implies a robust 29% upside for the year ahead. (To watch Kotowski’s track record, click here)Overall, WhiteHorse has a unanimous Strong Buy analyst consensus rating, with 3 buy-side reviews on record. The stock is currently priced at $11.65 and its $13.25 average price target suggests it has a one-year upside of 14%. (See WHF stock analysis on TipRanks)Capital Southwest Corporation (CSWC)Last but not least is Capital Southwest, another Texas-based company in the business development sector. CSWC focuses on lending and credit options for mid-market companies. Capital Southwest boasts a portfolio featuring $664 million invested into 69 companies, and has over $150 million in liquidity available.Revenues have been recovering since going negative in Q1, at the height of the corona crisis. Sequential gains in both Q1 and Q2 have brought quarterly revenues to $21 million, while earnings in Q3 showed a strong spike to 45 cents per share, the highest value in over two years.Rising earnings have allowed Capital Southwest to keep up its history of reliable dividend payments. The company raised its dividend going into 2020, and has maintained the 51-cent payment all year. The 10.5% yield is more than 4x higher than the average found among financial sector peer companies, bringing CSWC to the attention of dividend investors.Among CSWC’s fans is JMP analyst Devin Ryan, who rates the stock a Buy and gives it a $17 price target. (To watch Ryan’s track record, click here)”Overall, we think results for the quarter were strong and that Capital Southwest is one of the most attractive ways to gain exposure to lower-middle-market direct originations. We highlight improving credit quality, strong portfolio growth, a solid pipeline of deal flow, sustainable core/supplemental dividends and management’s focus on expenses as reasons we think the stock is positioned to outperform,” Ryan opined.All in all, CSWC has a Strong Buy rating from the analyst consensus, with 3 recent Buy reviews and 1 Hold. Shares have an average price target of $15.67, which is almost flat compared to the current trading price. The real return here is in the dividend. (See CSWC stock analysis at TipRanks)

,

Contact Us

Please use our Instant Quote form to see if you're pre-qualified for a non-recourse stock loan, or if you have any questions or feedback, please email, call or chat with us.

deals@internationalliquiditypartners.com

+44 20 3994 1588

Headquarters: Hunkins Waterfront Plaza, Charlestown, Nevis

Open 24 hours a day / 7 days a week / 365 days a year

 

 

 

Frequently Asked Questions

What Is Securities-Based Lending?
Securities-based lending, or a stock loan, is the practice of using market investments such as stocks, ETF’s, warrants, bonds, or real estate investment trusts as collateral for a loan.
How much money can I get for my securities?
Borrow up to 80% of the value of your pledged investments giving you the capital you need to expand your business, purchase real estate, or tackle a costly project.
What happens if my securities lose value?
With a non-recourse stock loan, you can walk away from your securities at any time and keep the loan money with no negative credit consequences even if the investments lose value.
Is my information safe with ILP?
We pride ourselves on outstanding service and make client confidentiality our top priority. You can always be absolutely certain your information is safe with us.
How long does it take for the disbursement of funds?
Most of the transactions we process take less than 7 days from application to the disbursement of funds giving you cash quickly when you need it most.
What credit score do I need to qualify?
There are no credit checks or personal guarantees necessary with our services. Your pledged securities are the only collateral required for the loan you receive.

Instant Quote

Please fill out your information to see if you are pre-qualified.

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

International Liquidity Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

International Liquidity Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with International Liquidity Partners, LLC’s internal lending policies. International Liquidity Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Nevis Office

Main Street
Hunkins Waterfront Plaza
Charlestown, Nevis

New York Office

Coming Soon!

Follow Us

Market Coverage