2 High-Yield Stocks Under $5 Wall Street Predicts Will Rally 65% or More

NASDAQ: SHIP | Seanergy Maritime Holdings Corp News, Ratings, and Charts

SHIP – Given current market uncertainties due to the Russia-Ukraine war and the potential for aggressive central bank interest rate increases this year, dividend stocks are expected to attract significant investor interest since they deliver a steady income stream. Therefore, Wall Street analysts expect high dividend-yielding stocks Seanergy Maritime (SHIP) and National CineMedia (NCMI), which are currently trading at less than $5, to rally in price in the coming months. Read on.

The consequences of the Russia-Ukraine war and the potential for aggressive interest rate hikes by the Federal Reserve to control surging inflation are expected to prolong market uncertainty at least in the near term. However, a rebound still seems likely because the economy is expected to continue recovering this year. Furthermore, the market has absorbed most negatives and advanced since the beginning of last week.

Dividend stocks are expected to attract much more investor attention in the coming months because they help dodge market volatility by offering a steady income stream. Moreover, dividends paid by U.S. companies increased by 3.5% in 2021. Investors’ interest in high dividend-paying stocks is evident from the SPDR Portfolio S&P 500 High Dividend ETF’s (SPYD) 4.5% returns over the past three months, compared to the SPDR S&P 500 Trust ETF’s (SPY) 5.7% decline.

Therefore, Wall Street analysts expect high dividend-yielding stocks Seanergy Maritime Holdings Corp. (SHIP) and National CineMedia, Inc. (NCMI), which are currently trading at less than  $5, to rally by more than 65% in price in the coming months.

Seanergy Maritime Holdings Corp. (SHIP)

Headquartered in Athens, Greece, SHIP, an international shipping company, engages in the seaborne transportation of dry bulk commodities, primarily iron ore and coal worldwide. It operates a fleet of 17 Capesize vessels.

On March 16, 2022, SHIP announced the completion of its marine biofuel trials in cooperation with one of its major charterers, NYK Line. Stelios Psillakis, the Company’s Technical Director, said, “The new marine biofuels coming to market can contribute significantly to the imminent need to reduce the GHG emissions. We strongly believe that using biofuels, in combination with the Energy Saving Devices (“ESDs”) installed or to be installed on our vessels, will cater for a smooth transition to greener energy, whilst providing a competitive and compliance advantage for early movers.”

SHIP’s forward annual dividend translates to an 8.13% yield. Its payout ratio is 11.9%. On March 10, 2022, SHIP approved a regular quarterly dividend of $0.025 per share for the fourth quarter of 2021. The company also declared a special dividend of $0.025 per share.

SHIP’s net vessel revenue increased 166% year-over-year to $56.70 million in the fourth quarter, ended Dec. 31, 2021. Its net income was $20.64 million, compared to a $2.32 million loss in the previous period. Also, its EPS came in at $0.11, compared to a $0.03 loss per share in the year-ago period.

Analysts expect SHIP’s revenue to be  $167.86 million in 2022, increasing at a rate of 9.6% annually. Its EPS is estimated to increase 19.4% to $0.37 in 2023. Over the past three months, the stock gained 33.5% in price to close yesterday’s trading session at $1.23. Wall Street analysts expect the stock to hit $2.03 in the near term, which indicates a potential 68.5% upside.

National CineMedia, Inc. (NCMI)

NCMI, through its subsidiary, National CineMedia, LLC, operates a cinema advertising network in North America. The Centennial, Colo.-based company is the largest cinema advertising network in the U.S. It operates more than  20,700 screens in more than  1,600 theaters in 195 Designated Market Areas.

On March 3, 2022, NCMI’s CEO Tom Lesinski said, “Given the ongoing recovery in cinema attendance, we are very optimistic about 2022. For the first time since the start of the pandemic, we are starting the year with meaningful upfront bookings, a very strong high-quality film slate for the year, and growing consumer demand to return to the theaters as COVID-19 infection levels decrease and mask mandates loosen.”

NCMI has been paying dividends for 14 consecutive years. Its forward annual dividend translates to an 8.13% yield, while its four-year average yield is 10.75%. On March 3, 2022, the company approved a quarterly cash dividend of $0.05 per share.

For the fiscal fourth quarter, ended Dec. 30, 2021, NCMI’s revenue came in at $63.50 million, up 304.5% year-over-year. Its net income was  $8.60 million, compared to a $35.20 million loss in the year-ago period. Furthermore, the company’s EPS came in at $0.11, compared to a $0.45 loss per share in the prior-year period.

NCMI’s revenue is expected to be $302.15 million in its fiscal year 2022, representing a 163.7% year-over-year rise. The company’s EPS is also expected to increase 1,300% year-over-year to $0.24 in its fiscal 2023. The stock closed yesterday’s trading session at $2.46. Analysts expect the stock to hit $4.50 in the near term, which indicates a potential 82.9% upside.

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SHIP shares were trading at $1.18 per share on Thursday morning, down $0.05 (-4.28%). Year-to-date, SHIP has gained 28.48%, versus a -5.35% 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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