In a tough market, each serious investor is searching for a path to riches. Some conventional approaches include looking at stocks with share appreciation in mind. Another commonly used – and more defensive – method is to embrace dividend-paying stocks to provide dependable returns. However, during times like these, there are some gems to be found that can bring it to you both ways.
Several dividend champions are currently providing potential investors with a double whammy: in addition to having high dividend yields, they also have significant upside potential. For conservative investors, this may be a win-win situation, as big dividends and substantial share price increases seldom go hand in hand. But when they do, investors wanting to cushion their portfolio gains against market turbulence are given a strong chance.
Join me while I break down three uniquely positioned stocks that come with discounted prices, high dividend yields, and the approval of analysts, making for timely additions to our portfolios:
Deluxe Corp (DLX)
Deluxe Corp (DLX) is a payments and business technology firm based in the United States. Payments, cloud, promotional items, and checks are its business segments. DLX had around 4.5 million small enterprises and 4,000 financial institutions (as customers) as of 2020. DLX provides personal and business checks, marketing, web building, web hosting, and fraud prevention services. New England Business Services Inc., McBee, and Checks Unlimited are among DLX’s subsidiary brands. DLX operates printing and fulfillment, contact centers, web servers, and administrative activities from locations in the U.S., Australia, Canada, and Europe.
Since early 2020, not long after the pandemic’s arrival, DLX has had typically growing revenue. Compared to the $441.3 million reported in the same quarter last year, DLX‘s Q1 2022 top line of $556 million is a 26% increase. DLX has consistently bested Wall Street’s earnings projections quite comfortably, most recently exceeding EPS expectations by 2.61% and revenue by 4.49%. DLX shows year-over-year revenue growth of 26.01%, and its current quarter indicates revenue of $528.3 million, at $1.05 per share. DLX’s 12-month price goal is 40.50, with a high estimate of 42.00 and a low of 39.00 from the analysts providing annual price projections. The consensus forecast shows a 92.49% gain from recent pricing, and the consensus from analysts also gives DLX a buy rating that investors should keep in mind. DLX has a dividend yield of 5.70%, with a quarterly payout of 30 cents per share.
Rent-A-Center Inc (RCII)
Rent-A-Center (RCII) is an American rent-to-own company that was founded in 1986 and is based in Plano, TX. RCII is an innovative industry leader which provides down-scale – or extremely thrifty – clients with flexible lease-purchase arrangements and access to an extensive range of consumer items such as electronics, furniture, appliances, and computers. Customers who profit from the goods have the opportunity to purchase after the lease and avoid long-term, high-interest loan commitments. RCII runs over 1,900 retail stores. Acima, a tech-based leasing company in a similar niche – but mainly operating online or through its mobile app – was acquired by RCII last year, modernizing its business model.
Regarding numbers, RCII is still producing. In Q1 2022, RCII earned $1.2 billion, up from $1.04 billion the previous year. It also earned $205.3 million in revenue from operations, of which $188.9 million was free cash flow. Regarding analysts’ earnings projections, RCII beat EPS and revenue forecasts by 4.86% and 4.18%, respectively. The firm reports again before too long but presently shows $1.1 billion in sales and EPS of $1.02. RCII has a median price target of 42.00, with a high of 65.00 and a low of 23.00 from the analysts that provide 12-month price forecasts. The median forecast is a 103.39% gain over current pricing, and analysts give RCII a generous buy rating that feels well-earned. RCII has a dividend yield of 6.59%, with a quarterly payout of 34 cents per share.
Riley Exploration Permian Inc (REPX)
Riley Exploration Permian Inc (REPX) is one of numerous independent hydrocarbon exploration and development firms active in West Texas and New Mexico’s Permian Basin. This geological structure has generated news over the last decade and fueled Texas’ return to the global energy market. REPX describes itself as a growth-oriented oil and natural gas business involved in acquiring, developing, developing, and producing natural gas, oil, and natural gas liquids reserves on its Permian land assets. REPX was founded in 1994 and is headquartered in Knoxville, TN.
For Q2 2022, REPX witnessed total output of 7.5 MBbls – or 7,500 barrels – per day. This marked year-over-year growth of 24% and came in at the upper range of projections. REPX earned $34.4 million in EBITDA (Earnings Before Interest, Taxes, Depreciation, & Amortization) on $41 million in operating income. REPX’s operating cash flow was $30 million in the quarter. Relative to its modest market cap of $458 million, these numbers are more significant than they seem. And REPX has progressively exceeded Wall Street’s revenue projections for the past four consecutive quarters. Recently, Q2 2022’s revenue forecasts were surpassed by 37.08% and 35.10% in Q1 2022. REPX shows year-over-year growth in the crucial areas, which is expected to continue. REPX has a median price target of 47.00, with a high of 52.00 and a low of 42.00, according to analysts providing annual price estimates. The consensus forecast reflects a 98.82% increase over its last price, and it has a confident buy rating in the face of a chaotic market. REPX has a dividend yield of 5.24%, with a quarterly payout of 31 cents per share.
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