There’s so much going on in the markets, that it’s hard to know where to start and what to look for. On the red side of the ledger, it’s clear that the headwinds are gathering. House Democrats are still rejecting the $1.8 trillion coronavirus aid and stimulus package put forth by the White House, saying that President Trump’s proposal does not go far enough. The House Dems are pushing their own $2.2 trillion stimulus. At the same time, both Eli Lilly and Johnson & Johnson have paused their coronavirus vaccine programs, after the latter company reported an “adverse event” in early trials. This has more than just investors worried, as most hopes for a ‘return to normal’ hang on development of a working vaccine for the novel virus.And earnings season is kicking off. Over the next several weeks, we’ll see Q3 results from every publicly traded company, and investors will watch those results eagerly. The consensus is, that earnings will be down year-over-year somewhere between 20% and 30%. With this in mind, we’ve used the TipRanks database to pull up three dividend stocks yielding 6% or more. That’s not all they offer, however. Each of these stocks has a Strong Buy rating, and considerable upside potential.Philip Morris (PM)First on the list is tobacco company Philip Morris. The ‘sin stocks,’ makers of tobacco and alcohol products, have long been known for their good dividends. PM has taken a different tack in recent year, with a turn toward smokeless tobacco products, marketed as cleaner and less dangerous for users’ health.One sign of this is the company’s partnership with Altria to launch and market iQOS, a heated smokeless tobacco product that will allow users to get nicotine without the pollutants from tobacco smoke. PM has plowed over $6 billion into the product. Given the regulatory challenges and PR surrounding vaping products, PM believes that smokeless heated tobacco will prove to be the stronger alternative, with greater potential for growth.No matter what, for the moment PM’s core product remains Marlboro cigarettes. The iconic brand remains a best seller, despite the long-term trend of public opinion turning against cigarettes.As for the dividend, PM has been, and remains, a true champ. The company has raised its dividend payment every year since 2008, and has reliably paid out ever quarter. Even corona couldn’t derail that; PM kept up its $1.17 quarterly payment through 2020, and its most recent dividend, paid out earlier this month, saw an increase to $1.20 per common share. This annualizes to $4.80, and gives a yield of 6%.Covering PM for Piper Sandler, analyst Michael Lavery likes the move to smokeless products, writing, “We remain bullish on PM’s strong long-term outlook, and we believe recent iQOS momentum throughout the COVID-19 pandemic has been impressive. iQOS has had strong user growth and improving profitability, and store re-openings could further help drive adoption by new users.”Lavery rates PM shares an Overweight (i.e. Buy), and his $98 price target implies a one-year upside of 24%. (To watch Lavery’s track record, click here)Overall, the Strong Buy consensus rating on PM is based on 9 reviews, breaking 8 to 1 in Buy versus Hold. The shares are priced at $79.10 and their $93.56 average price target suggests an 18% upside potential. (See PM stock analysis on TipRanks)Bank of N.T. Butterfield & Son (NTB)Butterfield is a small-cap banking firm based in Bermuda and providing a full range of services to customers on the island – and on the Caymans, the Bahamas, and the Channel Islands, as well as Singapore, Switzerland, and the UK. Butterfield’s services include personal and business loans, savings accounts and credit cards, mortgages, insurance, and wealth management.Butterfield saw revenues and earnings slide in the first half of this year, in line with the general pattern of banking services globally – the worldwide COVID-19 pandemic put a damper on business, and bankers felt the hit. Earnings in the last quarter of 2019 were 87 cents per share, and by 2Q20 were down to 67 cents. While a significant drop, that was still 21% better than the expectations. At the top line, revenues are down to $121 million. NTB reports Q3 earnings later this month, and the forecast is for 63 cents EPS. Along with beating earnings forecasts, Butterfield has been paying out a strong dividend this year. By the second quarter, the dividend payment was up to 44 cents per common share, making the yield a robust 7%. When the current low interest rate regime is considered – the US Fed has set rates near zero, and Treasury bonds are yielding below 1% – NTB’s payment looks even better.Raymond James Donald Worthington, 4-star analyst with Raymond James, writes of Butterfield, “…robust capital levels [provide] more than sufficient loss absorption capacity in our view for whatever credit issues may arise. Its fee income stability has proven valuable given the impacts of declining rates on NII, where the bank has actively managed expenses to help support earnings. We continue to believe its dividend is safe for now given its low-risk loan portfolio, robust capital levels, and our forecast for a sub-100% dividend payout even under our stressed outlook.”These comments support the analyst’s Outperform (i.e. Buy) rating, and his $29 price target suggests a 15% upside for the coming year. (To watch Worthington’s track record, click here)Overall, NTB has 4 recent reviews, which include 3 Buys and a single Hold, making the analyst consensus rating a Strong Buy. This stock has a $29 average price target, matching Worthington’s. (See NTB stock analysis on TipRanks)Enviva (EVA)Last on our list is an energy company, Enviva. This company holds an interesting niche in an essential sector, producing “green” energy. Specifically, Enviva is a manufacturer of processed biomass fuel, a wood pellet derivative sold to power generation plants. The fuel is cleaner burning than coal – an important point in today’s political climate – and is made from recycled waste (woodchips and sawdust) from the lumber industry. The company’s production facilities are located in the American Southeast, while its main customers are in the UK and mainland Europe.The economic shutdowns imposed during the corona pandemic reduced demand for power, and Enviva’s revenues fell in 1H20, mainly due to that reduced demand. Earnings remained positive, however, and the EPS outlook for Q3 predicts a surge back to 45 cents – in line with the strong earnings seen in the second half of 2019.Enviva has shown a consistent commitment to paying out its dividend, and in last quarter – the August payment – the company raised the payment from 68 cents per common share to 77 cents. This brought the annualized value of the dividend to $3.08 per share, and makes the yield 7.3%. Even better, Enviva has been paying out regular dividends for the past 5 years.Covering this stock for Raymond James is analyst Pavel Molchanov, who rates EVA as Outperform (i.e. Buy) and sets a $44 price target. Recent share appreciation has brought the stock close to that target.Backing his stance, Molchanov writes, “Enviva benefits from an increasingly broad customer base, and there is high-visibility growth via dropdowns. In the context of the power sector’s massive coal retirements — including (as of September 2020) 34 countries and 33 subnational jurisdictions with mandatory coal phase-outs…” (To watch Molchanov’s track record, click here.)Enviva’s Strong Buy consensus rating is based on 4 Buys and 1 Hold. It’s share price, which has gained in recent sessions, is $42.60, and as mentioned, it has closed in on the $44.80 average price target. (See EVA stock analysis at TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.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.,
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