Stock futures slipped today on disappointing earnings reports from major technology companies. The U.S.’ weekly jobless claims fell more than expected last week to 281,000. However, the U.S economic growth rate has slowed to 2% due to decelerating consumer spending and residential investments.
Also, the market may experience heightened volatility due to the supply chain bottlenecks, rising inflation, and the continuing spread of COVID-19. Therefore, since dividend-paying stocks can reduce overall portfolio risk and volatility, they could be ideal bets now. Investors’ interest in dividend stocks is evident in the SPDR S&P Dividend ETF’s (SDY) 16.6% returns year-to-date.
Given this backdrop, we think it could be wise to bet on high-yield dividend stocks Vector Group Ltd. (VGR), Westlake Chemical Partners LP (WLKP), and One Liberty Properties, Inc. (OLP). These stocks are rated as Strong Buy in our proprietary POWR Ratings system.
Vector Group Ltd. (VGR)
VGR, through its subsidiaries, manufactures and sells cigarette products in the United States. The company operates in two segments: Tobacco; and Real Estate. It produces cigarettes in 100 combinations under the EAGLE 20's, Pyramid, Montego, and other brand names. Also, VGR provides real estate business through its New Valley subsidiary. VGR is headquartered in Miami, Fla.
VGR paid a $0.20 quarterly dividend on September 29, 2021. The stock distributes a $0.80 per share dividend annually, which translates to a 5.92% yield.
Last month, New Valley Ventures, an investment vehicle managed by Douglas Elliman's parent company, VGR, launched a renter rewards program via a strategic investment in Bilt Rewards. The program will allow renters to enroll in the loyalty program to earn points on rent with no fees. The company believes in improving the renting experience and that this reward program will help build long-lasting relationships with residents.
VGR’s total revenues increased 63.7% year-over-year to $729.53 million for the second quarter, ended June 30, 2021. The company’s operating income grew 105.2% from its year-ago value to $137.08 million. Its net income rose 262% from the prior-year quarter to $93.31 million. Also, the company’s EPS increased 281.3% year-over-year to $0.61.
Analysts expect VGR’s revenue to increase 26.6% year-over-year to $2.53 billion in its fiscal year 2021. VGR has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 92.3% in the current year. Its stock price has increased 33.9% over the past year.
VGR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has a B grade for Value, Growth, and Quality. We’ve also graded VGR for Sentiment, Momentum, and Stability. Click here to access all VGR’s ratings. VGR is ranked #1 of 11 stocks in the B-rated Tobacco industry.
Westlake Chemical Partners LP (WLKP)
WLKP operates and develops ethylene production facilities and other qualified assets. The Houston, Tex., company also markets ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and other products. In addition, its business and operations are conducted through OpCo.
WLKP paid a $0.47 quarterly dividend on August 26, 2021. The stock distributes a $1.89 per share dividend annually, which translates to a 7.34% yield. Its dividend has grown at an 8.6% rate over the past five years.
During the second quarter, ended June 30, 2021, WLKP’s total net sales increased 35.1% year-over-year to $322.23 million. The company’s gross profit grew 45.5% from its year-ago value to $131.03 million. Its operating income rose 46.3% from the prior-year quarter to $122.76 million, and its EPS increased 65.1% year-over-year to $0.71.
WLKP’s revenue is expected to increase 12.7% year-over-year to $1.09 billion in its fiscal year 2021. Also, its EPS is expected to increase by 12.2% in the current year. Furthermore, the stock has gained 7.7% in price over the past nine months and 39.5% over the past year.
WLKP’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has an A grade for Sentiment and Quality, and a B for Momentum.
One Liberty Properties, Inc. (OLP)
Incorporated in 1982, OLP is a self-administered and self-managed real estate investment trust (REIT). The company acquires, owns, and manages a geographically diversified portfolio of industrial, retail, office, and other properties. Also, it owns 121 properties located in 30 states. OLP is based in Great Neck, N.Y.
OLP declared a $0.45 quarterly dividend, which was paid on October 7, 2021. The stock distributes a $1.80 per share dividend annually, which translates to a 5.7% yield.
For the second quarter, ended June 30, 2021, OLP’s total revenues came in at $20.42 million. The company’s operating income increased 252% year-over-year to $28.96 million. Its net income grew 921.1% from its year-ago value to $23.33 million. Also, the company’s EPS rose 1,020% from the prior-year quarter to $1.12.
Analysts expect OLP’s revenue to increase 2% year-over-year to $84.11 million for its fiscal year 2022. OLP has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters. Also, its EPS is expected to grow 60% in the next quarter. Its stock price has increased 106.7% over the past year.
It’s no surprise that OLP has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has a B grade for Stability, Quality, and Sentiment.
VGR shares were trading at $13.40 per share on Friday morning, down $0.11 (-0.81%). Year-to-date, VGR has gained 20.08%, versus a 23.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.3 High-Yield Dividend Stocks That are Smart Buys appeared first on StockNews.com