Investing is all about making a profit, and investors have long looked at two main paths to that goal. Growth in shares, equity that will provide profits primarily based on the appreciation of share prices, is one way. The second route is through dividend stocks. These are shares that give the shareholder a percentage return – dividends, usually sent out every three months. Payouts vary widely, from less than 1% to more than 10%, but on average, among the stocks listed on the S&P 500, it is around 2%. Dividends are a great addition for patient investors, as they provide a steady stream of income. Goldman Sachs analyst Caitlin Burrows has looked into the real estate confidence segment, a group of stocks long known for their high dividends and reliability – and he sees plenty of reason to expect strong growth in the three stocks in particular. Running all three through the TipRanks database, we know that all three have been cheered up by the whole Street as well, as they boast of a “Strong Buy” analyst consensus. The First Broadstone Net Lease (BNL), the Broadstone Net Lease, is an established REIT that went public last September in an IPO that raised more than $ 533 million. The company placed 33.5 million shares on the market, followed by another 5 million-plus taken by the underwriters. It was considered a successful opening, and BNL now boasts a market cap of over $ 2.63 billion. The Broadstone portfolio includes 628 properties in 41 US states plus the Canadian province of British Columbia. The property houses 182 tenants and is worth a total of $ 4 billion. The best feature here is the long-term nature of the lease – the weighted average remaining lease is 10.8 years. During the third quarter, the most recent with complete financial reports available, BNL reported a net profit of $ 9.7 million, or 8 cents per share. Revenue mainly comes from leases, and the company reports collecting 97.9% of leases that are due during the quarter. Looking ahead, the company expects $ 100.3 million in property acquisitions during Q4, and an increase in rent collection rates by 98.8%. Broadstone’s income and high lease collections support a dividend of 25 cents per common share, or $ 1 per year. This is an affordable payout for the company, and offers investors a yield of 5.5%. Goldman’s Burrows sees the movement of company acquisitions as the most important factor here. “Acretive acquisitions are a major revenue driver for Broadstone … While management is halting acquisitions following the market uncertainty caused by COVID (BNL did not complete any acquisitions in 1H20) and ahead of its IPO, we believe acquisitions will pick up in 2021, and look to start this with activity 4Q20… We estimate that BNL achieves a positive investment difference of 1.8%, leading to 0.8% revenue growth (in FFO 2021E) for every $ 100 million of acquisitions (or 4.2% of our 2021E acquisition volume), ” Burrows Opinion To this end, Burrows rates BNL to Buy, and the $ 23 price target implies a ~ 27% increase for the next year. (To see Burrow’s track record, click here) Wall Street generally agrees with Burrows on Broadstone, as shown The stock has amassed by 3 positive reviews in recent weeks. This is the only review recorded, leading a consensus of analysts to rate Strong Buy den bro, unanimous. The stock is currently priced at $ 18.16, and the median target price is $ 21.33 Suggest one year increase of ~ 17%. (See BNL stock analysis at TipRanks) Realty Income Corporation (O) Realty Income is a major player in the REIT field. The company has a portfolio worth more than $ 20 billion, with more than 6,500 properties located in 49 states, Puerto Rico and the UK. Annual revenue exceeded $ 1.48 billion in fiscal 2019 (the last one with complete data), and has maintained monthly dividends for 12 years. Looking at current data, we find that O posted earnings of 7 cents per share in 3Q20, along with total revenue of $ 403 million. The company collected 93.1% of rental contracts in the quarter. Although relatively low, a trace to the monthly rate shows that lease collection rates have been increasing since July. As noted, O pays a monthly dividend, and has been doing so regularly since it went public in 1994. The company increased its payouts in September 2020, marking its 108th increase during that time. The current payout is 23.45 cents per common share, which is annualized to $ 2.81 cents – and gives a yield of 4.7%. Based on the explanation above, Burrows placed this stock on the American Confidence List, with a Buy rating and a target price of $ 79 for the next 12 months. This target implies an increase of 32% from current levels. Supporting his stance, Burrows noted, “We expect FFO growth of 5.3% per annum over 2020E-2022E, compared to an average of 3.1% for all REIT coverage. We expect the main revenue drivers will include a sustained recovery in acquisition volume and a gradual increase in theater rents (by 2022). “The analyst added,” We assume O made $ 2.8 billion from acquisitions in 2021 and 2022 respectively, versus consensus expectations of $ 2.3 billion. [We] believes our acquisition volume assumption could turn out to be conservative because, eight days into 2021, the company has made or agreed to make a $ 807.5 million acquisition (or 29% of our forecast for 2021). “Overall, Wall Street is taking over. A bullish stance on Realty Income stocks. The 5 Buy and 1 Hold issued over the previous three months makes the stock a Strong Buy. Meanwhile, the $ 69.80 average target price suggests a ~ 17% increase. of the current share price. (See O stock analysis on TipRanks) Important Property Realty Trust (EPRT) Lastly, Essential Properties, owns and manages a portfolio of single tenant commercial properties across the US There are 214 tenants in over 1000 properties in 16 industries, including car washes, convenience stores, medical services, and restaurants. Essential Properties boasts a high occupancy rate of 99.4% for its properties.In 3Q20, the company saw an 18.2% increase in revenue year-over-year, reaching $ 42.9 million. Essential Properties f completed the quarter with $ 589.4 million available liquidity, including cash, cash equivalents, and available credit. Sahaan is confident enough to raise its dividend in Q4. The new dividend payout is 24 cents per common share, up 4.3% from the previous payment. The rate is currently 96 cents per year, and gives a yield of 4.6%. The company has increased its dividend regularly over the past two years. In his review for Goldman, Burrows focuses on the recovery that Essential Properties has made since the peak of the COVID panic last year. “When the mandate for refuge came into effect in early 2020, only 71% of EPRT properties were open (fully or in a limited manner). The situation has improved in the following months and now only 1% of the EPRT portfolio is closed… We expect EPRT’s future revenue growth to be driven by additional acquisitions and forecast a 2.8% potential revenue growth from the $ 100 million acquisition, ”Burrows wrote. In line with his optimistic approach, Burrows gave EPRT shares a Buy rating, along with a one-year price target of $ 26, indicating a 27% increase. Overall, EPRT has the most recent 9 analyst reviews, and the 8 Buy and 1 Sell details give the stock a Strong Buy consensus rating. The stock is priced at $ 20.46 and has an average target price of $ 22.89, providing a ~ 12% increase potential from current levels. (Check out EPRT stock analysis at TipRanks) To find great ideas for trading dividend stocks with an attractive valuation, visit TipRanks ‘Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are those of top 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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