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Stock market news live updates: Stocks erase gains after reaching record highs

Emily McCormick
·Reporter
·9 min read
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Stocks turned lower Wednesday morning, and the S&P 500 tracked toward a second day of declines.

Each of the three major indexes declined intraday after rising to reach record highs shortly after market open. However, all three major indexes have performed strongly for February to date, as has the small-cap Russell 2000, which reached its own record high before turning slightly lower.

Companies that reported quarterly results in the last day largely topped expectations, adding to the pile of estimates-topping reports for last quarter.

Lyft’s stock (LYFT) surged more than 8% after the company said it could be profitable as soon as the third quarter this year, or a full quarter ahead of earlier estimates, thanks to rigorous cost-cutting measures. Shares of Twitter (TWTR) jumped 9% after the company’s sales grew more than expected and its profit beat estimates, though it warned that user growth will likely slow in 2021 after a pandemic-era boom.

So far, companies comprising more than three-quarters of the S&P 500’s market capitalization have reported fourth-quarter results. In aggregate, these results have topped expectations by nearly 17%, and 80% of companies beat their own projections, according to an analysis by Credit Suisse’s Jonathan Golub.

But even amid strong earnings and supportive monetary and fiscal policy, some strategists have begun to debate whether the recent leg higher in markets can be sustained in the very near-term as sentiment starts to get frothy.

“We’ve seen a very strong phase of what I’d call fast markets: A strong rally the last six months in risk assets across the board,” Joseph Little, HSBC Global Asset Management global chief strategist, told Yahoo Finance. “And what that means in practical terms for investors is that a lot more is now discounted. And the story around recovery, around faster economic improvements, around the vaccines is now, at this point, well-known to investors and to other market participants. And that poses the question of what could happen to markets next.”

“My suspicion is that we’re at a point now where, as more is discounted, it becomes harder and harder for the news to really support the market further and further. And that creates what I call a hypersensitivity,” he added. “It means markets are rather vulnerable if the news flow becomes a little bit more difficult, if the news flow begins to disappoint. I’d still be positive as we look out over a six month view. But it could mean that after the run that we’ve seen, we’re in line for a phase of maybe a bit more consolidation.”

Others, however, have remained more upbeat.

“It’s clear that there’s a lot of optimism out there, but I would argue that there are good reasons to be optimistic. Keep in mind that just six or eight months ago, there was an expectation that it would take much longer, if at all, to develop a vaccine that protects against COVID-19,” Kristina Hooper, Invesco chief global market strategist, told Yahoo Finance. “The fact that we have effective vaccines, extremely effective vaccines that are now being distributed means that there is a light at the end of this tunnel and it is a bright light, hence a lot of optimism. Especially given we have a very accommodative Fed, and we also have a decent amount of fiscal stimulus and potentially more coming.”

—

12:39 p.m. ET: Stocks hold lower

Here’s where markets were trading Wednesday afternoon:

  • S&P 500 (^GSPC): -10.22 points (-0.26%) to 3,901.01

  • Dow (^DJI): -37.05 points (-0.12%) to 31,338.78

  • Nasdaq (^IXIC): -61.63 points (-0.44%) to 13,946.77

  • Crude (CL=F): +$0.35 (+0.6%) to $58.71 a barrel

  • Gold (GC=F): +$4.10 (+0.22%) to $1,841.60 per ounce

  • 10-year Treasury (^TNX): -2.1 bps to yield 1.136%

—

11:52 a.m. ET: Analysts get more bullish on Twitter after strong 4Q advertising sales beat, sparking wave of price target revisions

Wall Street firms are getting more bullish on Twitter (TWTR) after the company posted much stronger than expected fourth-quarter sales, in a testament to the broader pick-up in online advertising as well as the success of the company’s efforts to revamp its advertising products. Advertising revenue surged 31% to $1.15 billion during the fourth quarter, accelerating from the 15% ad sales growth in the prior quarter. However, the company did warn its user growth would likely slow this year.

Here’s what some analysts said about Twitter’s results:

  • JPMorgan’s Doug Anmuth (price target raised to $77 from $65): “On the heels of our December upgrade, TWTR remains one of our top 5 stock picks in 2021 (along w/GOOGL, FB, PTON, LYFT) and we believe our bull case is playing out mostly as expected—sharp ad recovery, continued solid engagement, ad product prioritization & innovation, underlying activist efforts helping to improve operational discipline, and the upcoming February 25 Analyst Day as an additional potential catalyst for shares.”

  • Cowen’s John Blackledge (price target raised to $58 from $48): “Twitter is a popular social platform, with rising monetization and operating income, although competitive concerns and valuation drive our Market Perform view. Twitter's user growth has consistently been in the low double digits, and we expect DAUs (EOP) to grow modestly through 2026.”

  • MKM Partners (price target raised to $73 from $60): “We believe TWTR's innovation engine has finally started to crank up new features and products, and believe that there are several low-hanging fruits for Twitter to attract self-service ad dollars.”

—

9:31 a.m. ET: Stocks open higher

Here’s where markets were trading shortly after market open:

  • S&P 500 (^GSPC): +18.25 points (+0.47%) to 3,923.75

  • Dow (^DJI): +122 points (+0.39%) to 31,400.00

  • Nasdaq (^IXIC): +62 points (+0.45%) to 13,742.25

  • Crude (CL=F): +$0.03 (+0.05%) to $58.39 a barrel

  • Gold (GC=F): +$15.60 (+0.85%) to $1,853.10 per ounce

  • 10-year Treasury (^TNX): -0.3 bps to yield 1.1570%

—

9:03 a.m. ET: General Motors tops 4Q estimates, but says 2021 earnings will be hit by chip shortages

General Motors (GM) reported fourth-quarter earnings and revenue that topped expectations, though the car-maker said its profit would be hit in the current fiscal year due to chip shortages.

Adjusted earnings were $1.93 per share on revenue of $37.52 billion, with both metrics better than the $1.57 per share on revenue of $35.88 billion expected.

Chip shortages, which have rattled other companies in the auto industry as well, will cut operating profit by between $1.5 billion to $2.0 billion in 2021, GM added, and will also impact production and cash flow. Earlier this month, GM already announced it had extended a halt on production at three North American plants due to chip shortages.

—

8:40 a.m. ET: Consumer prices increased mildly in January as inflation remained tame

A core measure of consumer price changes increased less than expected in January, according to the Labor Department’s monthly report Wednesday, as inflationary trends remained tame during the ongoing pandemic.

The headline consumer price index (CPI) rose 0.3% in January over December, matching estimates, according to Bloomberg consensus data. However, excluding more volatile food and energy prices, the CPI was unchanged, following an unchanged reading in December as well.

Over last year, CPI excluding food and energy prices rose 1.4%, decelerating from December’s 1.6% increase and coming in below estimates for rise a 1.5%.

—

7:24 a.m. ET: Mortgage applications dropped 4.1% last week as interest rates hit the highest level since November

Mortgage applications dropped by 4.1% during the week ending February 5 following a jump of more than 8% during the prior period, according to the Mortgage Bankers’ Association’s weekly report. The drop came as interest rates started to creep higher, pressuring demand, though overall housing market activity remained sharply higher compared to a year ago.

Beneath the headline mortgage application index, refinances fell by 4% from a week earlier, but remained 46% higher than the same week in 2020. Purchases fell by 5% on a seasonally adjusted basis. Unadjusted, however, purchases were up 2% week-on-week and were 17% higher than the year-ago period.

“Mortgage rates have increased in four of the first six weeks of 2021, with jumbo rates being the only loan type that saw a decline last week. Despite some weekly volatility, Treasury rates have been driven higher by expectations of faster economic growth as the COVID-19 vaccine rollout continues,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

“With the 30-year fixed rate increasing to 2.96%– a high not seen since last November – refinances declined, and their share of total applications dipped to the lowest level in three months,” he added. “Government refinance applications did buck the trend and increase, and overall activity was still 46% higher than a year ago. Demand for refinances is still very strong this winter.”

—

7:17 a.m. ET Wednesday: Stock futures extend gains overnight, pointing to a higher open

Here’s where markets were trading, as of 7:17 a.m. ET Wednesday morning:

  • S&P 500 futures (ES=F): 3,917.75, up 12.25 points or 0.31%

  • Dow futures (YM=F): 31,360.00, up 82 points or 0.26%

  • Nasdaq futures (NQ=F): 13,726.5, up 46.25 points or 0.34%

  • Crude (CL=F): +$0.27 (+0.46%) to $58.63 a barrel

  • Gold (GC=F): +$3.20 (+0.17%) to $1,840.70 per ounce

  • 10-year Treasury (^TNX): +0.8 bps to yield 1.165%

—

6:09 p.m. ET Tuesday: Stock futures hold near record levels

Here’s where markets were trading Tuesday evening as overnight trading kicked off:

  • S&P 500 futures (ES=F): 3,911.00, up 5.5 points or 0.14%

  • Dow futures (YM=F): 31,312.00, up 34 points or 0.11%

  • Nasdaq futures (NQ=F): 13,694.50, up 14.25 points or 0.1%

A man wears a protective mask as he walks past the New York Stock Exchange on the corner of Wall and Broad streets during the coronavirus outbreak in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson
A man wears a protective mask as he walks past the New York Stock Exchange on the corner of Wall and Broad streets during the coronavirus outbreak in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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    Chamath Palihapitiya has been labeled the King of SPACs and it could come with good reason. What Happened: Palihapitiya has launched six SPACs on his quest to bring SPACs with tickers IPOA to IPOZ to market. Three of the SPACs have completed deals, one has a pending merger and two are still searching for targets. Palihapitiya has also been involved with six SPACs as a member of the private investment in public equity, commonly referred to as the PIPE. The investor tweeted last Friday to “trust the process” after a short report from Hindenburg Research attacked his recently completed SPAC deal Clover Health Investments (NASDAQ: CLOV). The tweet shows that all 12 deals he has been a part of have performed well. Related Link: 5 Things You Might Not Know About Chamath Palihapitiya The Palihapitiya SPACs: A look at the SPACs. Virgin Galactic (NYSE: SPCE) was the first SPAC deal completed in the IPOA to IPOZ run from Palihapitiya. Shares of the space company are up 129% year-to-date and up over 440% since the IPOA offering. Opendoor Technologies (NASDAQ: OPEN) is an on-demand digital experience to buy and sell a home. Shares of Opendoor are up 17% year-to-date and up 166% since the shares of IPOB went public. Clover Health offers Medicare Advantage plans. The company says it holds a top-three market share position in its established market. Clover Health shares are down 23% year-to-date but are up 29% since the IPOC offering. Social Capital Hedosophia Holdings Corp IV (NYSE: IPOD) has not named a merger target yet. Shares of the SPAC are up 21% year-to-date and up 65% over their lifetime. Social Capital Hedosophia Holdings Corp V (NYSE: IPOE) announced a merger with fintech company SoFi in early January. Shares of the SPAC are up 86% year-to-date and up 131% over their lifetime. Social Capital Hedosophia Holdings Corp VI (NYSE: IPOF) has not named a merger target yet for the largest SPAC offering from Palihapitiya. Shares of the SPAC are up 26% year-to-date and up 55% over their lifetime. The PIPE Deals: Along with his own SPACs, Palihapitiya has funded six SPAC deals as a member of the PIPE. MP Materials (NYSE: MP) is a rare earth mining company that is the "thing behind the thing" to support electric vehicles and wind turbines in the future. Shares of MP Materials are up less than 1% on the year and up 222% over their lifetime. Desktop Metal Inc (NYSE: DM) is a 3D printing company bringing additive manufacturing 2.0 to large industrial customers. Shares are up 82% year-to-date and up 212% over their lifetime. INSU Acquisition Corp II (NASDAQ: INSU), a pay per mile insurance company, announced a SPAC merger in November. Palihapitiya invested as part of the PIPE choosing the company as his way to attack the growing disruptive insurance market. Shares are up 13% year-to-date and up 76% over their lifetime. ArcLight Clean Transition Corp (NASDAQ: ACTC) is bringing electric bus company Proterra public in a SPAC deal that includes Palihapitiya as part of the PIPE. Shares are up 125% year-to-date and up over 149% since going public. TS Innovation Acquisition Corp (NASDAQ: TSIA) is bringing enterprise SaaS company public in a SPAC deal. Shares are up 65% year-to-date and up over 67% since going public. Spartan Acquisition Corp II (NYSE: SPRQ) is taking residential solar financing company Sunlight Financial public. Shares are up 22% year-to-date and up over 27% since the offering. Disclosure: The author is long shares SPCE, IPOD, SPRQ. Strong Performance And Demand: The 12 SPAC deals that Palihapitiya has been involved in have produced an average 47% return for shareholders in 2021. The average lifetime gain for the 12 SPAC deals involving the SPAC King is 137%. A Twitter poll tracking how many of the 12 SPACs are currently and were at some point owned by responders showed strong interest in Palihapitiya SPACs. Okay new question for my #spacsquad on this Friday night. Of the 12 Chamath spacs listed below, how many do you currently own and how many of them have you owned at some point. For me it is 4/6. @SpacGuru @SpacTiger @BillSPACman @Mindwalletbody @stocktalkweekly @SPACtrack https://t.co/Xv7KNbP8U5 — Chris Katje (@chriskatje) February 5, 2021 See more from BenzingaClick here for options trades from BenzingaZillow, Opendoor Can Triple While Disrupting Real Estate Market: Loup VenturesStarlink Begins Taking Preorders, Musk Eyes IPO When Cash Flow Predictable© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Electric Aircraft Startup Archer to Go Public Via SPAC Atlas Crest Investment; Shares Lift Off

    By John Jannarone and Jarrett Banks Electric aircraft startup Archer Aviation Inc. is going public by merging with a special purpose acquisition company, or SPAC, called Atlas Crest Investment Corp. (NYSE: ACIC), the startup said in a statement. The $3.8 billion deal is expected to close in the second quarter of 2021, and will provide about $1.1 billion in […]

  • Don’t Get Greedy With Ocugen Stock, Says Analyst

    What does it take to move a stock price from $0.29 to $15.81 -- an increase of 5,350% -- in just 18 days? Coronavirus, of course. Or more precisely, a vaccine to fight it. An unprofitable biotech that focused on commercializing therapies to cure blindness prior to the present pandemic, Ocugen (OCGN) stock took on a new life on December 22, when it announced plans to co-develop Indian Bharat Biotech's "Covaxin" vaccine against the SARS-CoV-2 coronavirus. Ever since that announcement, the stock has been on a tear, leaving Chardan analyst Keay Nakae's previous $0.70-per-share price target in the dust. Yesterday, Nakae took another look at Ocugen at its present share price, and declared it overpriced, downgrading the shares to Neutral (i.e. Hold). However, the analyst did raise his price target to $13 (to account for the stock's astounding run-up in price), which implies a 17% upside from current levels. (To watch Nakae's track record, click here) Why is Nakae having second thoughts about Ocugen now? Valuation is obviously a concern, and certainly the primary one. After all, hype aside, Ocugen stock is a company almost entirely devoid of revenues. In all the past year, its sales haven't exceeded $50,000 (It almost goes without saying, then, that Ocugen has no profits). At its current market capitalization, therefore, Ocugen stock sells for a mind-numbing 40,000 times trailing sales, which is kind of a lot. Now, what must Ocugen do to justify this valuation -- one that's not just "sky high" above fair value, but more orbiting somewhere out past Saturn? First and foremost, notes Nakae, the company has to win Emergency Use Authorization for Covaxin from the FDA, which will be no easy trick. Although Covaxin has an ongoing Phase III clinical trial, that's happening in India, and Nakae thinks that even after initial results are in (probably in March), the company may need to conduct an additional study in the U.S. to win FDA approval. Next, Ocugen will need to set up manufacturing operations to produce the vaccine in the U.S. This will of course cost money, and this is probably one reason why Nakae predicts the company "will likely need to raise debt or equity funds in the future." (After all, Ocugen "does not have any products that generate revenue" currently, and the $19 million it has in the bank probably won't cover all the bills needed to set up manufacturing operations). Finally, once manufacturing has been set up and the vaccine goes on sale, the company will have to compete with multiple other vaccines already on the market -- and then split any profits that do result with its partner Bharat. And of course, all of this only happens if the vaccine proves effective, and safe enough to convince the FDA to issue the EUA. So how long will all of this take? How long before Ocugen turns into something resembling a business, as opposed to just a "coronavirus play?" Nakae doesn't say, but he also forecast Ocugen collecting any revenues at all this year, so it won't be soon. So, that’s Chardan's view, what does the Street of the Street have in mind? The current outlook offers a conundrum. On the one hand, based on 3 Buys and 1 Hold, the stock has a Strong Buy consensus rating. However, after surging so high this year, the average price target, at $7.38, implies ~34% downside over the coming months. It will be interesting to see whether the analysts downgrade their ratings or upgrade price targets over the coming months. (See OCGN stock analysis on TipRanks) To find good ideas for coronavirus 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 analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • 10 Tax Breaks for People Over 50

    The perks of agingOnce you turn 50, and especially after age 65, you can qualify for extra tax breaks. Older people get a bigger standard deduction, and they can earn more before they have to file a tax return at all.

  • SpaceX opens Starlink satellite internet pre-orders to the public

    SpaceX’s Starlink is taking another small step towards expanding its public beta test by opening up pre-orders to budding customers. Whereas previously you could register your interest for the chance to sign up to the satellite internet service, entering your details now gives you the ability to put down a $99 deposit. Additional charges include $499 for the Starlink Kit, including a Wi-Fi router and dish, and extras for shipping and tax.

  • Reddit User Who Leaked Tesla's Bitcoin Investment News Was Just High

    A Reddit poster who claimed to be in the know of Tesla Inc’s (NASDAQ: TSLA) investment in Bitcoin (BTC) has confirmed that the information he made public on Jan. 2 was not true, the New York Post reported Tuesday. What Happened: After Tesla made its Bitcoin investment announcement on Monday, attention turned to the Reddit post by the user TSLAInsider made five-weeks prior. See also: How to Buy Bitcoin (BTC) “I am a software dev working at R&D at Tesla in California, over the past 72 hours our company bought 24701 BTC at an average price of 33142$,” the user with the handle TSLAinsider posted on Reddit last month,” the post read, as reported by Reuters. The Post claimed that the Reddit user behind the TSLAInsider handle is a 24-year old German political science student named Hendrik. “If you want to know the truth: I am a young German guy and I was on Acid while I did this post in the last month,” Hendrik told the Post in an interview. “I had this afflatus that Elon is going to buy Bitcoin, so I created this trollpost. And now all the newspapers around the globe are writing about it, its kinda funny and scary to be honest.” The user posted a link to the Post’s story and appeared to corroborate it. Why It Matters: Reddit forums have been in the increased spotlight ever since r/WallStreetBets took Wall Street bigwigs head-on with a short squeeze in the shares of GameStop Corp (NYSE: GME), AMC Entertainment Holdings Inc (NYSE: AMC), Blackberry Ltd (NYSE: BB), and others. See Also: Reddit Pays Ode To GameStop 'Underdogs' In 5-Second Super Bowl Ad Treasury Secretary Janet Yellen last week said last week that financial market regulators needed to take stock of the frenzy surrounding GameStop and other stocks before taking any action, according to Reuters. The social media platform doubled its valuation to $6 billion as it raised $250 million in Series E funding from existing and new investors. Bitcoin touched its all-time high of $48,003.72 on Tuesday after the Tesla announcement. The cryptocurrency traded 0.10% higher at $46,392.83 at press-time. On Tuesday, Grayscale Bitcoin Trust (OTC: GBTC) closed 4.84% higher at $47.90. Price Action: Tesla shares closed nearly 1.6% lower at $849.46 on Tuesday and fell 0.47% in the after-hours session. Read Next: This Is How Tesla Could Let You Buy An EV With Bitcoin See more from BenzingaClick here for options trades from BenzingaThis Is How Tesla Could Let You Buy An EV With BitcoinTesla China EV Sales Doubled To .6B In 2020© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Cramer Gives His Opinion On AMD, Alibaba And More

    On CNBC's "Mad Money Lightning Round," Jim Cramer said AMD CEO Lisa Su is the toughest person in the business. He would buy Advanced Micro Devices, Inc. (NASDAQ: AMD). The construction business is a very hard business, but if you had to navigate it, it would be Jacobs Engineering Group Inc (NYSE: J), said Cramer. Dycom Industries, Inc. (NYSE: DY) is terrific, said Cramer. It had a big run, but there is plenty of business for the company. See also: How to Buy AMD Stock Cramer prefers Toll Brothers Inc (NYSE: TOL), Lennar Corporation (NYSE: LEN) and D. R. Horton Inc (NYSE: DHI) over Green Brick Partners Inc (NASDAQ: GRBK). Alibaba Group Holding Ltd - ADR (NYSE: BABA) got through its problems with the government and now it is free to make money, said Cramer. He wants the stock to come down a bit before he pulls the trigger. Cramer would hold onto Sherwin-Williams Co (NYSE: SHW) because it had an extraordinary quarter. See more from BenzingaClick here for options trades from BenzingaScott Nations Crude Oil Futures Trade'Halftime Report' Picks For February 8: AMD, Yum China And More© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • 3 Big Dividend Stocks Yielding at Least 9%; BTIG Says ‘Buy’

    How important are dividends to a stock investor’s profits? Speaking before the Financial Industry Regulatory Authority (FINRA) on October 15, 2007, investing guru John Bogle laid out the case: “Over the past 81 years… reinvested dividend income accounted for approximately 95 percent of the compound long-term return earned by the companies in the S&P 500. These stunning figures would seem to demand that mutual funds highlight the importance of dividend income.” So in other words, dividends are pretty important! Of course, right now the average stock on the S&P 500 is only paying about a 2% dividend yield, which isn’t a lot. If you want to do better than that, though, the REIT sector is a great place to begin your search for high-yield dividend stocks. REITs are companies that acquire, own, operate, and manage real estate portfolios, usually some combination of residential or commercial real properties, or their associated mortgage loans and mortgage-backed securities. Tax law requires that these companies return profits directly to shareholders, and most of them choose dividends as their vehicle of choice for compliance, resulting in frequent high dividend yields across the sector. The slowly ebbing COVID pandemic was hard on real estate managers, as tenants had trouble making rents and owners had trouble leasing vacant space. However, BTIG analyst Tim Hayes believes there are reasons to stay bullish on CRE properties specifically. "While we recognize the headwinds to commercial real estate (CRE) fundamentals and the potential risk to equity/earnings power, we believe there are several reasons to be constructive, especially with the sector trading at a discount to historical levels and offering attractive dividend yields at wide spreads to benchmark rates," Hayes commented. Against this backdrop, we’ve opened up the TipRanks database to get the latest stats on Hayes’ CRE choices. These are stocks that the analyst initiated Buy ratings on, pointing out their high dividend yield. We are talking about at least 9% here. Ares Commercial Real Estate (ACRE) The first dividend pick we are looking at is Ares Commercial Real Estate, a company focused on the commercial real estate mortgage sector. Ares boasts a diversified portfolio – featuring office space, apartments, hotels, and mixed-use properties – mainly across the Southeast and West. The company has over $2 billion invested in 49 separate loans, 95% of which are senior mortgage loans. At the end of October, the company released 3Q20 earnings (the last reported quarter), showing $22.4 million in total revenue, for a 13% year-over-year gain. The 45-cents earnings per common share was up 40% since the prior year. Furthermore, Ares closed a $667 million commercial real estate collateralized loan obligation, with firmed up funding on 23 senior loans. On the dividend front, Ares declared in December its 4Q20 dividend. The payment, at 33 cents per common share, was paid out on January 15 – and is fully covered by current income levels. At current rates, the dividend annualizes to $1.32 and gives an impressive yield of 10.50%. Among the bulls is Hayes, who wrote: “We believe shares of ACRE are unfairly discounted relative to other commercial mREITs given strong Ares sponsorship, a very healthy balance sheet, and limited exposure to at-risk assets.” In his view, this leaves the company “well positioned to face the headwinds from COVID-19.” In line with these comments, Hayes rates ACRE a Buy, and his $13.50 price target implies a 10% upside from current levels. (To watch Hayes’ track record, click here) Only one other analyst has posted a recent ACRE review, also rating the stock a Buy, which makes the analyst consensus here a Moderate Buy. Shares are priced at $12.28, and their $12.75 average price target suggests room for modest ~4% growth. (See ACRE stock analysis on TipRanks) KKR Real Estate Finance Trust (KREF) Next up we have KKR, which operates in the commercial real estate sector, with almost half of its holdings in the states of New York, Illinois, Pennsylvania, and Massachusetts. The company both owns and finances commercial properties; 83% of its activities are with apartment dwellings and office spaces in desirable urban locations. KKR’s quality can be seen in the company’s quarterly results. The liquidity position was strong – KKR reported $700.6 million available at the end of 3Q20, the last quarter reported. The 56-cent EPS was up 7% sequentially, and 36% year-over-year. Further evidence of KKR’s sound position came at the beginning of January, when the announced it had closed 7 new commercial loans in Q4, totaling $565.4 million. This level of activity is a clear sign that KKR is recovering from the pandemic-related economic turndown. The solid foundation put the company in position to continue its dividend – which has been kept reliable for four years now. The most recent declaration, made in December, was for a 43-cent per common share dividend that was paid out in mid-January. That rate gives an annual payment of $1.72 per common share, and a robust yield of 9.7%. Covering KREF, Hayes is most impressed by the company’s move back toward proactive loan origination, saying, “We view 4Q20 origination activity to be in line with pre-pandemic production, and demonstrates a shift from “defense” to “offense” as transaction activity has picked up and the capital markets remain accommodative. We expect increased capital deployment to support earnings power and dividend coverage, and could potentially warrant an increase in the dividend as the macroeconomic outlook improves.” To this end, Hayes gives KREF a Buy and sets a $19.50 price target that indicates ~6% growth from current levels. (To watch Hayes’ track record, click here) Wall Street has been keeping quiet on all things KREF, and the only other recent review also recommends a Buy. Put together, the stock has a Moderate Buy consensus rating. Meanwhile, the average price target stands at 19.26 and implies a modest ~5% upside. (See KREF stock analysis on TipRanks) Starwood Property Trust (STWD) For the third stock on Hayes’ list of picks, we turn to Starwood, a commercial mortgage REIT with a varied portfolio of first mortgages and mezzanine loans, in the $50 million to $500 million range. The company operates in the US and Europe, boasts a $5.9 billion market cap, and has offices in New York, London, and San Francisco. Starwood’s high-end portfolio has brought it solid earnings, even during the ‘corona recession’ of 2020. The company recorded $152 million in GAAP earnings for 3Q20, coming out to 53 cents per share, for gains of 8% sequentially and 6% year-over-year. With that in the background, we can note the company’s dividend, which has been held steady at 48 cents per share for over two years. The last declaration was made in December, and the dividend was paid out on January 15. At the current rate, it annualizes to $1.92 and the yield is 9.23%. Once again, we’re looking at a stock that Hayes recommends to Buy. “We view STWD to be one of the few “blue chips” in the commercial mREIT sector given its size, liquidity, best-in-class management team, strong balance sheet, and diversified investment platform which has consistently generated stronger ROEs than peers. To that end, STWD is one of few commercial mREITs that neither restructured its liabilities with expensive rescue capital nor cut its dividend since the onset of COVID-19,” Hayes opined. Overall, there is little action on the Street heading STWD's way right now, with only one other analyst chiming in with a view on the company's prospects. An additional Buy rating means STWD qualifies as a Moderate Buy. However, the $21 average price target suggests shares will remain range bound for the foreseeable future. (See STWD stock analysis on 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.