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3 Top Dividend Stocks With Growth Opportunity; Goldman Sachs Says ‘Buy’

Investing is all about discovering earnings, and traders have lengthy seen two fundamental paths towards that purpose. Growth shares, equities that can give a return primarily based primarily on share worth appreciation, are one route. The second route lies by dividend shares. These are shares that pay out a share of earnings again to shareholders – a dividend, normally despatched out quarterly. The funds fluctuate broadly, from lower than 1% to greater than 10%, however the common, amongst shares listed on the S&P 500, is about 2%. Dividends are a pleasant addition for a affected person investor, as they supply a gentle revenue stream. Goldman Sachs analyst Caitlin Burrows has been trying into the actual property belief phase, a bunch of shares long-known for dividends which can be each excessive and dependable – and she or he sees loads of motive to anticipate robust development in three shares specifically. Running the trio by TipRanks’ database, we discovered that each one three have been cheered by the remainder of the Street as properly, as they boast a “Strong Buy” analyst consensus. Broadstone Net Lease (BNL) First up, Broadstone Net Lease, is a longtime REIT that went public this previous September in an IPO that raised over $533 million. The firm put 33.5 million shares available on the market, adopted by one other 5 million-plus picked up by the underwriters. It was thought of a profitable opening, and BNL now boasts a market cap over $2.63 billion. Broadstone’s portfolio contains 628 properties throughout 41 US states plus the Canadian province of British Columbia. These properties host 182 tenants and are value an combination of $4 billion. The finest function right here is the long-term nature of the leases – the weighted common remaining lease is 10.8 years. During the third quarter, the newest with full financials out there, BNL reported a internet revenue of $9.7 million, or 8 cents per share. The revenue got here primarily from rents, and the corporate reported gathering 97.9% of rents due through the quarter. Looking forward, the corporate expects $100.3 million in property acquisitions throughout This fall, and an elevated lease assortment price of 98.8%. Broadstone’s revenue and excessive lease collections are supporting a dividend of 25 cents per frequent share, or $1 yearly. It’s a cost inexpensive for the corporate, and providing traders a yield of 5.5%. Goldman’s Burrows sees the corporate’s acquisition strikes as an important issue right here. “Accretive acquisitions are the key earnings driver for Broadstone… While management halted acquisitions following COVID-induced market uncertainty (BNL did not complete any acquisitions in 1H20) and ahead of its IPO, we are confident acquisitions will ramp up in 2021, and saw the beginning of this with 4Q20 activity… We estimate that BNL achieves a positive investment spread of 1.8%, leading to 0.8% of earnings growth (on 2021E FFO) for every $100mn of acquisitions (or 4.2% on our 2021E acquisition volumes),” Burrows opined. To this end, Burrows rates BNL a Buy, and her $23 price target implies an upside of ~27% for the year ahead. (To watch Burrow’s track record, click here) Wall Street generally agrees with Burrows on Broadstone, as shown by the 3 positive reviews the stock has garnered in recent weeks. These are the only reviews on file, making the analyst consensus rating a unanimous Strong Buy. The shares are currently priced at $18.16, and the average price target of $21.33 suggests a one-year upside of ~17%. (See BNL stock analysis on TipRanks) Realty Income Corporation (O) Realty Income is a major player in the REIT field. The company holds a portfolio worth more than $20 billion, with more than 6,500 properties located in 49 states, Puerto Rico, and the UK. Annual revenue exceeded $1.48 billion in fiscal year 2019 (the last with complete data), and has kept up a monthly dividend for 12 years. Looking at current data, we find that O posted 7 cents per share income in 3Q20, along with $403 million in total revenue. The company collected 93.1% of its contracted rents in the quarter. While relatively low, a drill-down to the monthly values shows that rent collection rates have been increasing since July. As noted, O pays out a monthly dividend, and has done so regularly since listing publicly in 1994. The company raised its payout in September 2020, marking the 108th increase during that time. The current payment is 23.45 cents per common share, which annualizes to $2.81 cents – and gives a yield of 4.7%. Based on the above, Burrows put this stock on her Americas Conviction List, with a Buy rating and a $79 price target for the next 12 months. This target implies a 32% upside from current levels. Backing her stance, Burrows noted, “We estimate 5.3% FFO growth per year over 2020E-2022E, versus an average of 3.1% fo rour full REIT coverage. We expect key earnings drivers will include a continued recovery in acquisition volumes and a gradual improvement in theater rents (in 2022).” The analyst added, “We assume O makes $2.8 billion of acquisitions in each of 2021 and 2022, versus the consensus expectation of $2.3 billion. [We] believe our acquisition volume assumptions could in fact turn out to be conservative as, eight days into 2021, the company has already made or agreed to make $807.5 mn of acquisitions (or 29% of our estimate for 2021).” Overall, Wall Street takes a bullish stance on Realty Income shares. 5 Buys and 1 Hold issued over the earlier three months make the inventory a Strong Buy. Meanwhile, the $69.80 common worth goal suggests ~17% upside from the present share worth. (See O inventory evaluation on TipRanks) Essential Properties Realty Trust (EPRT) Last up, Essential Properties, owns and manages a portfolio of single-tenant industrial properties throughout the US. There are 214 tenants throughout greater than 1000 properties in 16 industries, together with automotive washes, comfort shops, medical providers, and eating places. Essential Properties boasts a excessive occupancy price of 99.4% for its properties. In 3Q20, the corporate noticed income improve of 18.2% year-over-year, reaching $42.9 million. Essential Properties completed the quarter with a powerful $589.4 million in out there liquidity, together with money, money equivalents, and out there credit score. The robust money place and rising revenues had the corporate assured sufficient to boost the dividend in going into This fall. The new dividend cost is 24 cents per frequent share, up 4.3% from the earlier cost. The present price annualizes to 96 cents, and provides a yield of 4.6%. The firm has been elevating its dividend often for the previous two years. In her evaluate for Goldman, Burrows focuses on the restoration that Essential Properties has made because the top of the COVID panic final 12 months. “When shelter in place mandates went into impact in early 2020, solely 71% of EPRT’s properties have been open (fully or on a restricted foundation). This state of affairs has improved within the intervening months and now simply 1% of EPRT’s portfolio is closed… We anticipate EPRT’s future earnings development to be pushed by acquisition accretion and estimate 2.8% potential earnings development from $100 mn of acquisitions,” Burrows wrote. In line along with her optimistic method, Burrows provides EPRT shares a Buy score, together with a $26 one-year worth goal, suggesting a 27% upside. All in all, EPRT has 9 latest analyst evaluations, and the breakdown of 8 Buys and 1 Sell provides the inventory a Strong Buy consensus score. Shares are priced at $20.46 and have a median worth goal of $22.89, giving ~12% upside potential from present ranges. (See EPRT inventory evaluation on TipRanks) To discover good concepts for dividend shares buying and selling at enticing valuations, go to TipRanks’ Best Stocks to Buy, a newly launched software that unites all of TipRanks’ fairness insights. Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is essential to do your individual evaluation earlier than making any funding.