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【don callis attacked by fan】5 High-Yield Stocks to Defy Coronavirus-Led Crisis in April
8 k y 1 m 4 w 4 c q g i 8 6 2 j s f 3 n 5 8 0 u a u2024-09-29 12:25:10【Leisure】0人已围观
简介With cities under lockdown and factories closed due to the coronavirus outbreak, stocks have been re don callis attacked by fan
With cities under lockdown and factories closed due to the coronavirus outbreak,don callis attacked by fan stocks have been recording steep declines. In fact, benchmarks including the S&P 500 Index fell 12.5%, while the DOW and the Nasdaq declined 13.7% and 10.1%, respectively in the past 30 days
The rapid spread of the virus in the absence of a cure or vaccination raises investor concern about the U.S. economic outlook. Millions will be facing unemployment and businesses have to strive hard to address liquidity and solvency issues. On Mar 31, the Conference Board reported that the index of consumer confidence fell to 120 in March from a revised 132.6 in February, a 32-month low. Consumers are rapidly losing confidence in the economy as the deadly virus wreaks havoc.
Investors have been looking for safe investment options as the economic impact of coronavirus keeps growing. High-yield stocks are in focus in times of crisis like the current one, as high dividend payout ratio of these companies will offer a constant income stream. Along with that the Federal Reserve’s two emergency rate cuts in March have brought interest rates to 0-0.25%. Now, with loans available at cheaper rates, the flow of money is expected to continue at these dividend-paying companies.
5 Top D
ividend Players to Buy
Given the current turmoil in the global market caused by the steep rise in COVID-19 cases, we have shortlisted five high-yield stocks that can return well at the time of crisis.
Our first choice is
Enviva Partners, LP
EVA that produces and sells utility-grade wood pellets. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Biofuels industry’s projected earnings growth of 40.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 29% upward over the past 60 days.
Enviva Partners, a Zacks Rank #1 (Strong Buy) company, has a dividend yield of 9.7%, and its five-year average dividend yield is 8.6%.You can see
the complete list of today’s Zacks #1 Rank stocks here.
Real estate investment trust
MGM Growth Properties LLC
MGP also make it to our list. The company is engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts. The company’s expected earnings growth rate for the current year is 5.6% against the ZacksREIT and Equity Trust - Otherindustry’s projected earnings decline of 0.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.7% upward over the past 60 days.
Story continues
MGM Growth Properties, a Zacks Rank #1 company, has a dividend yield of 7.9%, and its five-year average dividend yield is 5.5%.
Next we have,
Chimera Investment Corporation
CIM that invests in a portfolio of mortgage assets. The company’s expected earnings growth rate for the next year is 5.2% compared with the Zacks REIT and Equity Trust industry’s projected earnings growth of 4.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 2.9% upward over the past 60 days.
Chimera Investment, a Zacks Rank #1 company, has a dividend yield of 19.3%, and its five-year average dividend yield is 11.6%.
DCP Midstream, LP
DCP owns, operates, acquires and develops a portfolio of midstream energy assets in the United States. The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Oil and Gas - Production and Pipelines industry’s projected earnings decline of nearly 19%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 18.6% upward over the past 60 days.
DCP Midstream, a Zacks Rank #2 (Buy) company has a dividend yield of 93.1%, and its five-year average dividend yield is 9.8%.
Last on our list is
Teekay LNG Partners L.P.
TGP, amarine transportation service provider for liquefied natural gas, liquefied petroleum gas and crude oil worldwide. The company’s expected earnings growth rate for the current year is 54.2% compared with the Zacks Transportation - Shipping industry’s projected earnings growth of 8.2%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.6% upward over the past 60 days.
Teekay LNG Partners, a Zacks Rank #2 company has a dividend yield of nearly 8%, and its five-year average dividend yield is 5.6%.
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Teekay LNG Partners L.P. (TGP) : Free Stock Analysis Report
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- 5%, led by a 17% increase in average ticket and a slight decline in traffic. Growth in the quarter reflected the impact of households stocking up on essentials like paper goods and cleaning supplies as the pandemic became a nationwide concern, along with strength in discretionary categories as the quarter came to a close and stimulus dollars and tax refunds were disbursed.
As shown below, the results in the quarter materially changed the trend in two-year stacked comps for each of the banners, along with a significant acceleration for consolidated comps.
The increase in consolidated comps was the primary driver of an 8% increase in revenues to $6.3 billion. The company ended the quarter with 15,370 locations, up less than 1% year-over-year. This reflects a 7% increase in Dollar Tree units, offset by a 4% decline in Family Dollar units.
The top-line results at each banner flowed through to their respective income statements, with Dollar Tree gross margins and operating margins declining year-over-year while Family Dollar gross margins and operating margins expanded year-over-year. On a consolidated basis, gross margins contracted by 120 basis points in the quarter to 28.5%, reflective of a shift to lower-margin consumables, tariff costs and the impact of markdowns from the Easter headwinds at the Dollar Tree banner. The company saw slight operating leverage on SG&A from higher comps, with the net result being an 80 basis point contraction in operating margins to 5.8%, with operating income declining 5% to $366 million. This is not adjusted for $73 million of pandemic-related costs, such as PPE supplies.
In the first quarter, the company opened 85 stores (net of closures) and completed 220 Family Dollar renovations to the H2 format. Importantly, comps at renovated Family Dollar stores continue to outpace the chain average by more than 10%. On the call, management indicated that they plan on reducing both the number of new store openings (from 550 to 500) and the number of H2 renovations (from 1,250 to 750) in 2020.
Personally, given the fact that Family Dollar is seeing material benefits to its business from the pandemic with new or lapsed customers coming into its stores, I think the company should try to get more aggressive with its renovation plans, not less. On the other hand, you could argue that renovations cause short-term disruptions and limit their ability to fully capitalize on the business momentum they are currently experiencing.
As a result of fewer new stores and remodels, management now expects 2020 capital expenditures to total $1.0 billion compared to previous guidance of $1.2 billion. In addition, the company has temporarily suspended share repurchases. At quarter's end, the company had $1.8 billion in cash on its balance sheet compared to $4.3 billion in total debt.
Conclusion
In recent years, Dollar Tree has been a tale of two cities. While its namesake banner has generally delivered impressive financial results, Family Dollar has been a persistent underperformer. This quarter, those results flipped, and given what we've seen in the weeks since quarter's end, there's a decent possibility that we will see something similar in the coming months. As the CEO noted, the second quarter is off to a very good start at Family Dollar.
Here's the important question: how useful is that information is in terms of making future predictions about the business? Will recent success at Family Dollar translate into long-term success for the banner? The optimistic take is that new or lapsed customers, especially those visiting the renovated stores, could become recurring business for the banner. The pessimistic take is that they have experienced short-term success out of necessity as people went to any store that was open to try and find essentials like toilet paper and hand sanitizer that were largely out of stock throughout the retail landscape. From that view, many of these customers could abandon the retailer when life returns to normal. As Philbin noted on the conference call, early on [during the pandemic], folks needed us. Will people still shop as much at Family Dollar when it's no longer a necessity?
Personally, I do not place too much weight on the recent results. I will need to see incremental data points that indicate that Family Dollar has truly won sustained business from these new customers. While I still believe that the Dollar Tree banner is a well-positioned retailer with attractive unit returns, I'm not yet willing to say the same thing for Family Dollar. For that reason, along with the recent run-up in the stock price, I plan on staying on the sidelines for now.
Disclosure: None
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