These 3 high-yield dividend stocks are among Credit Suisse's top picks for 2020

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Dividend stocks are always popular. They offer investors a clear path to quick returns, with regular cash payments, and a return – a return on the original investment – that typically far exceeds bond yields. But not all dividend stocks are the same and some offer better opportunities than others.

For starters, the highest yields are not always the way to go. Investors should also consider the stock's appreciation, upside potential and past performance. These factors are not always associated with dividends, but do affect the overall returns of a particular stock. The dividend yield is a key figure. The average return on S&P listed companies is only 2%, but that too is higher than the Fed's base rate of only 1.75%.

The international bank Credit Suisse started the new year with an in-depth look at various equity sectors. We will examine the company's preferred dividend stocks. These are the stocks that the company believes will bring investors the best combination of return and dividend growth in 2020.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Partner for corporate products (EPD)"data-reactid =" 14 ">Partner for corporate products (EPD)

We start with an energy company. Enterprise Products is located in the midstream oil and gas business and owns and operates nearly 80,000 km of gas and oil pipelines. Add storage capacity for 14 billion cubic feet of gas and 160 million barrels of oil, and import / export terminals on the Texas Gulf Coast, and Enterprise is a key player in the oil boom.

2019 was not friendly to Enterprise. Low oil prices, high costs and falling margins ultimately harmed the company. Fourth quarter figures are not yet available, but in the third quarter EPD failed to forecast sales and earnings per share. At the top line, sales were $ 7.94 billion, 3% below estimates, while earnings per share were down 50% at 50 cents.

The EPD has maintained its dividend on all issues. The company has long been committed to sharing earnings with shareholders and has maintained dividend payments for the past 20 years. Yields have changed over the years, but payouts have increased steadily since the third quarter of 2014. The current payment of 44.25 cents per quarter is $ 1.77. At 6.29%, the return is more than three times the average among S&P companies.

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Writing on EPD for Credit Suisse, Analyst Spiro Dounis In addition: “EPD is one of the best positioned companies in the industry. We expect EPD to continue to benefit from its scale and integrated system to offer competitive pricing for new projects and further expand its market share. By 2023, constant FCF generation is set to & gt; 8% return expected, which should allow a stronger focus on future return on investment. “The last point of Dounis is key because these returns on capital may include higher dividends. data-reactid = "18"> Analyst Spiro Dounis writes about EPD for Credit Suisse: "EPD is one of the best positioned companies in the industry. We expect EPD to continue to benefit from its scale and integrated system, to offer them competitive rates for new projects to further expand their market share … We see constant FCF generation that will increase to> 8% return by 2023, which should allow an increased focus on return on investment in the future. "Dounis & # 39 The final point is the key, as these RNS capital returns can include increased dividends.

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Dounis rates the share with a buy rating of 34 USD Price target, which suggests an upward movement of 21% from the current level. (To follow Dounis' success story, Click here) "data-reactid =" 19 "> Dounis gives the stock a buy rating with a target price of $ 34, suggesting an upward movement of 21% from current levels. (To track Dounis' track record, Click here)

<p class = "Canvas-Atom-Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Like Dounis, Wall Street chooses EPD as the long-term winner: With With 6 buy ratings in the past three months, the share achieved an analyst consensus of "Strong Buy". The average price target of $ 34.83 increases the upside potential to 23%. (See Enterprise Products stock analysis at TipRanks) "data-reactid =" 20 "> Like Dounis, Wall Street chooses EPD as long-term winner. With 6 buy ratings in the past three months, the stock achieves a" strong buy "analyst consensus The good news is that the average price target from $ 34.83 raised upside to 23% (see Enterprise Products stock analysis at TipRanks).

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Ford Motor Company (F)"data-reactid =" 29 ">Ford Motor Company (F)

Dearborn, the Ford engine from Michigan is the smallest of the three major American automakers. The company is known for being the first to introduce assembly line technology in modern factory manufacturing over a century ago. Ford has had recent successes in its popular, durable F-series of pickups and their derivatives.

In 2018, Ford saw both a decline in production and a profit on sales with total sales of over $ 160 billion that year. In the third quarter of 2019, the last quarter for which data is available, the company exceeded its earnings forecast and only missed sales. The quarterly results, first released after Moody's & # 39; s corporate bonds were reduced to junk status, showed 34 cents EPS, 8 cents better than expected, and total sales of $ 33.93 billion within one percent of the predicted value. The company is in the midst of an extensive restructuring program and is spending over $ 11 billion on modernizing the plant, designing new vehicles, and taking a big step toward electric vehicles.

The company does not forget its shareholders and investors, even if the business climate is difficult. Ford has paid its regular dividend at 15 cents a quarter for the past five years – and confused these payments with occasional special dividend payments. Despite the small amount of payment, F's low share price ensures a high return – an impressive 6.37%. The reliability with which the company maintained this dividend makes Ford a real dividend champion.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Credit Suisse’s Dan Levy is optimistic about Ford's recovery plan and future prospects. He writes: “We see upward movements in earnings improvement / positive earnings corrections as the good parts of the business continue to be strong (e.g. North America trucks, Ford Credit) while the below average businesses are recovering somewhat (e.g. Europe and China). Ford has ample opportunities to drive profit recovery / earnings improvement – making it one of the few positive EPS revisions in the automotive sector. "" Data-reactid = "37"> Dan Levy from Credit Suisse is optimistic about Ford's recovery plan and his future prospects. He writes: "We see positive effects on earnings improvement / positive earnings corrections, as the healthy parts of the business are still there are strong (e.g. North America trucks, Ford Credit), while below-average businesses are recovering somewhat (e.g. Europe and China). … Ford has ample opportunities to drive profit recovery / earnings improvement – making it one of the few positive EPS revision stories in the automotive sector. "

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The purchase rating of Levy & # 39; s is determined by a price target of underpins $ 11 and an upward trend of 17%. (To see Levy's track record, Click here) "data-reactid =" 38 "> Levy's buy recommendation is supported by a price target of USD 11 and an upward trend of 17%. Click here)

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Despite the strong prospects of a trend reversal and the clear The Company's Upside Potential According to analyst consensus, the F share has a hold rating and has received 8 analyst ratings in the past few months, including 2 buys, 4 holds and 2 sells. Ford shares sell for a bargain price of just $ 9.42 However, the average price target of $ 10.40 shows an increase of 11.47%. (See Ford's stock analysis at TipRanks) "data-reactid =" 39 "> Despite the strong turnaround prospects and the clear upside potential of the company, the F-share received a hold rating in the consensus of analysts. The share has received 8 analyst ratings in the past few months, including 2 buy- and 4 hold ratings. and 2 sells. Ford stocks sell for a bargain, only $ 9.42, but the average price target of $ 10.40 shows an upward trend of 11.47%. (See Ford's stock analysis at TipRanks)

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "International business machines (IBM)"data-reactid =" 48 ">International business machines (IBM)

IBM is a Dow Jones blue chip standard that produces the office equipment that everyone needs. Selectric typewriters have long dominated the electric typewriter market. The company has been a leader in computer technology since the days of punch card computers, and IBM PCs have helped set the standard for desktop computing. IBM acquired Red Hat last year to enter the cloud computing market. The company has annual sales of approximately $ 80 billion and a market capitalization of $ 119 billion. In short, IBM is a force to be reckoned with in business tech.

However, keeping a top position is associated with a high price. The acquisition of Red Hat cost IBM $ 34 billion and led to bookkeeping losses, which depressed the third quarter – the most recently reported – at $ 18.03 billion in revenue, just below the $ 18.22 estimate. However, there was good news for the quarter: Earnings per share, at $ 2.68, was in line with expectations, and the new Red Hat subsidiary saw sales grow 20%.

Like Ford, IBM stuck to its dividend in difficult times. At $ 1.62 quarterly, the payment is annualized to $ 6.48. The company has been increasing the dividend steadily since 2011, keeping the payments going for almost 20 years. At 4.79%, the yield is more than two and a half times the average of the S&P 500.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Matthew CabralIBM, a 4-star analyst at Credit Suisse, sees IBM as a process of changing gears and implementing a new strategy to cope with the changing technical business environment. He writes: “The acquisition of Red Hat represents a fundamental change of strategy for IBM and offers significant financial opportunities to drive the introduction of hybrid clouds in companies. Implementing their vision for hybrid clouds will make a significant contribution to changing the way IBM is presented. Opportunity to accelerate the business acquired and IBM's breakthrough. "" data-reactid = "52"> Matthew Cabral, a 4-star analyst at Credit Suisse, sees IBM as a company in a process of changing gears "The acquisition of Red Hat marks a fundamental change in IBM's strategy and offers significant ones Financial Opportunities to Drive Hybrid Cloud Deployment in Business Cloud Vision will be the key to changing the way IBM looks. This offers both the opportunity to accelerate the acquired business and the breakthrough of & # 39; Core & # 39; IBM. "

<p class = "canvas-atom canvas-text MB (1.0em) MB (0) – SM MB (0.8em) – SM" type = "text" content = "Cabral sets IBM a price target of USD 173 with a purchase Rating, its target implies an upward trend of 28% from yesterday's closing price. (To see Cabral's track record, Click here) "data-reactid =" 53 "> Cabral has set a price target of $ 173 and a buy rating for IBM, which implies a 28% rise from yesterday's closing price. (To track Cabral's track record, Click here)

<p class = "canvas-atom canvas-text MB (1.0em) MB (0) – SM MB (0.8em) – SM" type = "text" content = "Overall, IBM has a moderate purchase rating from the analyst consensus with 5 purchases and 4 Hold in recent weeks The stock also has the highest upside potential of the stocks on this list – the current trading price is $ 135 and the average price target of $ 163.71 shows up 22% growth potential. (See IBM stock research at TipRanks) "data-reactid =" 54 "> Overall, according to the consensus of the analysts, IBM has had a moderate buy rating of 5 purchases and 4 holdings in the last few weeks. The share also has the highest upside potential of the shares in this list – that is the current trading price $ 135, and the average target price of $ 163.71 shows up 22% growth potential (see IBM stock analysis at TipRanks).