Concerns about the Fed’s ability to tame inflation without pushing the economy into a recession have caused the stock market to tumble to a 13-month low recently. And according to Goldman Sachs strategists, even if a recession is avoided, the outlook for U.S. stocks isn’t particularly bright at this juncture.
According to Invesco’s Brian Levitt, investors are getting grossly bearish at this stage with such volatile market circumstances, and most of them are crowding over safe-haven dividend stocks, which promise to offer stable returns irrespective of market fluctuations. Investors’ interest in high dividend-yielding stocks is evident in the iShares Core High Dividend ETF’s (HDV) 5.2% returns over the past six months.
Wall Street analysts expect high-dividend-yielding stocks Sibanye Stillwater Limited (SBSW), ING Groep N.V. (ING), and Fortress Transportation and Infrastructure Investors LLC (FTAI) to rally by more than 55% in price in the coming months. So, these stocks could be wise additions to one’s watchlist.
Sibanye Stillwater Limited (SBSW)
Headquartered in Weltevreden Park, South Africa, SBSW and its subsidiaries mine for precious metals in South Africa, the United States, Zimbabwe, Canada, and Argentina. The company produces gold; platinum group metals (PGMs); and by-products.
SBSW’s dividend payouts have grown at a 21.8% CAGR over the past five years. Its current dividend translates to an 11.18% yield, while its four-year average yield is 2.58%.
SBSW’s profit before royalties and tax increased 4,511.5% sequentially to R10.47 billion ($653.68 million). Its adjusted EBITDA increased 3.7% sequentially, R13.66 billion ($853.26 million). Also, its Chrome sales came in at 640k tonnes, up 73% year-over-year.
Analysts expect SBSW’s EPS to increase 4% per annum over the next five years. The stock closed yesterday’s trading session at $11.59. The average price target of $21.68 indicates a potential upside of 87.1%.
ING Groep N.V. (ING)
Headquartered in Amsterdam, the Netherlands, ING, a financial institution, provides various banking products and services in the Netherlands, Belgium, Germany, Poland, the Rest of Europe, North America, Latin America, Asia, and Australia. It has six segments: Retail Netherlands; Retail Belgium; Retail Germany; Retail Other; Wholesale Banking; and Corporate Line Banking.
On May 6, 2022, ING’s CEO Steven van Rijswijk said, “We launched Self Invest via mobile in Belgium, expanding the possibilities for our customers when it comes to online trading. Customers continue to choose ING for investment products, as the total number of investment accounts globally rose nearly 13% year-on-year.”
Over the past three years, ING’s dividend payouts have grown at a 16.6% CAGR. Its current dividend translates to a 9.14% yield, while its four-year average yield is 4.69%.
For the period ended March 31, 2022, ING’s cash and balances came in at €131.37 billion ($138.65 billion), compared to €106.52 billion ($112.42 billion) for the period ended Dec. 31, 2021. Its trading assets were €55.61 billion ($58.69 billion), compared to €51.38 billion ($54.22 billion), for the same in the prior year. Furthermore, its total assets were €1.01 trillion ($1.06 trillion), compared to €951.29 billion ($1 trillion), for the same period in the prior year.
ING’s EPS is estimated to increase 13.3% per annum over the next five years. The stock closed yesterday’s trading session at $9.44. Wall Street analysts expect the stock to hit $15.00 in the near term, which indicates a potential upside of 58.9%.
Fortress Transportation and Infrastructure Investors LLC (FTAI)
New York City-based FTAI owns and acquires infrastructure and related equipment for the transportation of goods and people in Africa, Asia, Europe, North America, and South America. It operates through three segments: Aviation Leasing; Jefferson Terminal; and Ports and Terminals.
FTAI’s current dividend translates to a 7.10% yield, while its four-year average yield is 7.37%. On April 28, 2022, FTAI declared a $0.33 cash dividend on its common shares.
FTAI’s total revenues have increased 78.7% year-over-year to $137.84 million for the first quarter, ended March 31, 2022. Its investments came in at $78.50 million for the period ended March 31, 2022, compared to $77.33 million for the period ended Dec. 31, 2021. In addition, its goodwill came in at $257.97 million, compared to $257.14 million, also for the same period.
For its fiscal year 2022, analysts expect FTAI’s revenue to be $716.02 million, representing a 57.1% year-over-year rise. Its EPS is estimated to increase 234.7% to $1.59 in 2023. The stock closed yesterday’s trading session at $18.58. Wall Street analysts expect the stock to hit $34.33 in the near term, which indicates a potential upside of 84.8%.
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SBSW shares were trading at $11.69 per share on Wednesday morning, up $0.10 (+0.86%). Year-to-date, SBSW has declined -4.65%, versus a -15.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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