IIROC Trading Halt – AWR



2 dividend shares with a yield of at least 7%; The analyst says “buy”

The stock market retreated from all-time highs this week, as investors paused to reflect on what the stock decline was – and what the future might hold. A stimulus cash flow, triggered by the Biden administration’s hefty spending bills, is expected to push GDP growth to 9% for 3Q21, but next year it looks like it will pull back as spending will take their course. Economists forecast 5.5% GDP growth next year. This does not bode well for cyclical stocks, which tend to reflect macro volatility. As Mike Wilson, chief US equities strategist at Morgan Stanley, said, “The peak rate of change in economic data and earnings revisions … all contribute to the deterioration of lower quality market segments, to more. small cap and more cyclical. ” Dividend stocks, however, are more stable than cyclical stocks, and while their average returns are lower, they offer the advantage of consistent returns regardless of economic conditions. B. Riley analyst Matthew Howlett looked at the real estate trust segment, an equity group long known for its high and reliable dividends. Howlett pointed out two stocks, in particular, that have dividend yields above 7% and deserve a “buy” rating. Ladder Capital Corporation (LADR) We will step into the real estate investment trust (REIT) niche, with Ladder Capital, a specialist in commercial mortgages. Ladder has operations in 48 states and 475 cities. The average loan size is $ 19 million and the company has securitized or sold a cumulative total of $ 16.7 billion in commercial loans. The operations are supported by the company’s $ 5.9 billion in assets. Ladder Capital has experienced a series of headwinds over the past year. The corona pandemic, of course, was the major crisis – but for a commercial mortgage lender, the problem was broader. Loan customers took their own hits and found themselves unable to pay their payments. As a result, Ladder saw its quarterly results in 2020 show deep declines and greater volatility compared to 2019. On the positive side, Ladder ended 2020 with $ 1.25 billion in cash and cash equivalents. The last quarter of 2020 saw revenue of $ 77.9 million, compared to $ 135.4 million in the fourth quarter of the previous year. Distributable income, however, was $ 4.9 million – and the company declared a dividend of 20 cents per common share, which was paid on April 15. This was the fifth consecutive quarter with a dividend at this level. The current payout is annualized to 80 cents per share and yields a 7% return. Despite the difficult economic environment, LADR shares have risen 79% over the past 12 months. B. Riley Matt Howlett expects the momentum to continue and sees Ladder with a solid foundation to move forward. “[The] the company’s loan originator has been a major contributor to CMBS loans since the 2008-2009 financial crisis and is well positioned to contribute to LADR earnings growth as the middleman market rebounds from the pandemic Howlett noted. Howlett particularly likes the company’s cash position, noting that it “should allow the company to accelerate the growth of its core investment portfolio.” The analyst sees “a potential increase in the dividend (which is expected to increase to $ 1.05 in 2022) as the origins progress steadily and inherit the past. higher cost debts (Koch / legacy CLO) pay off. Backing up those comments with a buy note, Howlett sets a price target of $ 14 to suggest a 21% growth margin over the next 12 months. (To see Howlett’s track record, click here) Overall, Ladder gets a moderate buy rating from Wall Street analysts, based on 6 recent reviews that include 5 buys – but also just one sell. LADR shares are currently valued at $ 11.58, with an average target of $ 12.58 pointing to upside potential of 9% this year. The real draw to investors here is the high dividend yield. (See LADR stock review on TipRanks) Cherry Hill Mortgage (CHMI) The second stock we’re looking at, Cherry Hill, is another REIT, this one focused on residential markets. Cherry Hill’s portfolio includes mortgage management rights, mortgage-backed securities and other mortgage assets in the residential market. After a sharp decline in profits in the first quarter of last year, at a loss of $ 2.80 per share, Cherry Hill has seen sequential growth over the past three quarters. The fourth quarter of 2020 saw EPS return to positive values, printing 37 cents per share. Like most REITs, Cherry Hill pays a reliable dividend. The company has been maintaining payments since the fourth quarter of 2014, adjusting them as necessary to keep them in line with revenue. For the most recent quarter, the dividend was declared at 27 cents per common share, or $ 1.08 per year. At this rate, the dividend is yielding an impressive 11.5%. CHMI’s strong defensive characteristics and attractive dividend yield caught the attention of B. Riley Howlett. “[We] believe that the portfolio is better insulated against basis risk and that it would perform better in a rising interest rate environment… We believe that CHMI’s strong liquidity profile… places it in a strong position to deploy capital profitably during 1H21, ”Howlett said. The analyst continued, “We expect: 1) slower prepayment speeds and 2) declining maintenance costs in 2H21, which will be the main drivers of higher baseline ROEs going forward. Our forecast return on investment of 12.5% ​​for 2022 should allow the company to increase its quarterly dividend to $ 0.30 based on our model. Consistent with his optimistic outlook, Howlett credits Cherry Hill with a buy. Its price target of $ 11.50 implies that the stock has room to gain 21% over the next 12 months. CHMI has slipped under the radar of most analysts; the moderate buy consensus for the stock is based on just two recent ratings; Buy and keep. With stocks trading at $ 9.43, the average price target of $ 10.75 suggests a 14% margin upside. (See CHMI Stock Analysis on TipRanks) To find great ideas for dividend-paying stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. . 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.


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