2 large dividend stocks yield at least 7%; Raymond James Says ‘Buy’
For investors looking for a strong dividend player, there are some market segments known for their high-yield dividends, giving them a logical place to start looking for reliable payers. The hydrocarbon sector, oil and gas production and mainstreaming is one of these. This product deals with a product that is essential – our world operates on oil and its by-products. While overhead is high for energy companies, they still have a market for their deliverables, leading to a ready cash flow – which can be used, among other things, to pay dividends. All of this has investment firm Raymond James looking for roster oil and gas midstream companies for dividend shares with growth potential. “We hope [midstream] The group will make about ~ 1 turn in its EV / EBITDA this year. This equates to a ~ 20-25% move in equity value, “noted Raymond James analyst Justin Jenkins. Jenkins outlined a series of points leading to a midtest recovery in 2021, ranging from ‘lockdown’ to ‘ Reopen ‘policies include; a general boost on the path of commodities, as the economy raises, a political point that the anti-oil in some of DC’s more traditional centers, likely to vote in favor of Green New Deal policies Not, and in the end, with stock prices relatively low;, dividend yields are high. A glance at the TipRanks database reveals two midstream companies that have come to the attention of Raymond James – for all the above points. Stocks with a specific set of clear characteristics are: Dividend yield of 7.% or more and buy ratings. MPLX LP (MPLX) MPLX, which split from Marathon Petroleum eight years ago, as a separate midstream unit, Acquisition of a range of midstream assets including pipelines, terminals, refineries, and the river, Owns and operates. Shipping & Delivery. MPLX’s main area of operation extends to the northern Rocky Mountains and the Midwest and to the Gulf of Mexico coast in the south. The revenue potential through the ‘Corona Year’ of 2020 depicts the price potential of oil and gas flows. The company reported $ 2.18 billion on the top line in Q1, $ 1.99 billion in Q2, and $ 2.16 billion in Q3; Earnings turned negative in Q1, but were positive in both subsequent quarters. The Q3 report showed $ 1.2 billion in more than enough net cash generated to cover the company’s dividend distribution. MPLX normally pays 68.75 cents per share, or $ 2.75 annually, giving the dividend a high yield of 11.9%. The company has a diverse set of middlestream operations, and strong cash generation, with Raymond James’ Justin Jenkins leading factors that upgrade its stance on MPLX from neutral to outperform (ie buy). His price target, at $ 28, is a 22% one-year upside for the shares. (To see Jenkins’ track record, click here) Supporting his stance, Jenkins writes, “Given the number of story ‘boxes’ for MPLX, it is no surprise that this is a debate. The stock is. To influence G&P trends, with an expected refinement / refined product volume improvement, the story hits many operational boxes – while many financial debates intensify as well… we also think Is that solid 2020 financial results should give long-term confidence … “Now turn to the rest of the Street, it appears that other analysts are generally on the same page. The consensus rating comes as a strong buy, with 6 bues and 2 holes handed over in the last three months. Also, the $ 26.71 average price target puts the upside at ~ 17%. (See MPLX stock analysis on TipRank) DCP Midstream Partners (DCP), based in Denver, Colorado, is the next stock one of the nation’s largest natural gas midstream operators. The DCP controls a network of gas pipelines, hubs, storage facilities, and plants stretching between the Rocky Mountain, Midcontinent, and Permian Basin production areas, and the Gulf Coast of Texas and Louisiana. The company also operates in the Antrim gas field of Michigan. In the most recent quarter – 3Q20 – DCP assembled and processed 4.5 billion cubic feet of gas per day as well as 375 thousand barrels of natural gas liquids. The company reported $ 268 million in total cash generated, of which $ 130 million was free cash flow. The company reduced its debt load by $ 156 million in the quarter, and showed a 17% decrease in operating costs year-over-year. All of this allowed the DCP to maintain its dividend at 39 cents per share. Early in the Corona crisis, the company had to refund that payment – but only once. The recently announced 4Q20 dividend is fourth in a row at 39 cents per ordinary share. The annual rate of $ 1.56 gives a respectable yield of 7.8%. This is another stock that gets an upgrade from Raymond James. Analyst James Weston competed the stock from neutral to outperform (ie buy), while setting a target price of $ 24 for a 20% increase over a year’s time horizon. “[We] Hopefully, the DCP can post another solid quarter on gradual improvement in NGL prices, NGL market volatility, and positive upstream trends… We are not capitalizing on current propane prices and will have one over the next 12-18 months Are approximating solid, but more generalized pricing regimes. In our view, this DCP will create a profitable operating environment for cash flow that is not currently reflected in street estimates, ”said Weston. Overall, the Moderate by Analyst consensus rating on DCP is based on 7 recent reviews, which breaks the hold from 4 to 3 versus. The stock price is $ 19.58 and the $ 23 average target is upside down ~ 15% from that level. (See DCP Stock Analysis at TPCRx) To get good ideas for dividend stock trading at attractive valuations, buy from TipRank’s Best Stocks, a newly launched tool that unites equity insights across all TPranks. Disclaimer: The opinions expressed in this article are solely those of select analysts. Content is to be used for informational purposes only. It is very important to do your own analysis before making any investment.