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Click here to get it for free. Click Here... | | | | The best dividend stocks stocks nobody is talking about feature a silver miner and a gold miner, as well as a half dozen real estate investments trusts (REITs) that had been out of favor until it recently became clear that the Federal Reserve Board would begin a series of interest rate cuts.
The two dividend-paying precious metals stocks to buy traditionally offer protection from economic downturns and geopolitical risk, while the REITs already are on the rise with just one interest rate cut by the Fed and many others expected to follow in the next 12-18 months. The BofA Global commodities team remains bullish on silver and gold, forecasting that the latter can hit $3,000 per ounce in the next year or so.
The BofA analysts opined that precious metals prices have gained a boost from a Federal Reserve rate cut and an influx of non-commercial buyers like central banks across the world. As the market priced in a rate cut, gold rallied to many all-time highs in the third quarter of 2024, with silver following with shiny gains of its own.
A push to reduce the share of the U.S. dollar in foreign exchange portfolios can further drive increased precious metals purchases from central banks. Continued buying of gold by increasingly wealthy Chinese consumers may become a sensible diversifier in real estate-oriented investment portfolios, amid rising demand for precious metals from India.
The Best Dividend Stocks Nobody is Talking About: Pan American Silver
Pan American Silver Corp. (NYSE: PAAS)
Annual Dividend Yield: 1.57%
Pan American Silver Corp. (NYSE: PAAS) is a dividend-paying Vancouver, Canada-based mining company that focuses on silver and gold. It operates mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile and Argentina. BofA regards the company as its top silver recommendation.
The company owns the Escobal mine in Guatemala that is currently not operational, while further holding interests in exploration and development projects. Pan American Silver has been operating in the Americas for three decades.
BofA's price objective for Pan American Silver is $28.00, and is based on the stock trading at 1.25x the investment firm's estimated net asset value (NAV) on a net investments-adjusted basis. The investment firm estimated NAV for PAAS based on a 5% discount rate. Historically, North American precious metal stocks have traded between 1 and 3 times NAV, with silver producers generally selling at a discount to gold producers.
Chart courtesy of www.stockcharts.com
BofA's price objective for PAAS could be topped if commodity prices exceed forecasts, a favorable change occurs in the regulatory/permitting environment in the Chubut province of Argentina where Pan American's dormant Navidad project is located, operating results beat expectations and capital costs are reduced, the investment firm's analysts wrote. Risks to Pan American Silver reaching the BofA price goal could unfold from unforeseen operating issues, heightened capital costs, commodity prices dipping under forecasts and regulatory woes such as environmental and permitting hurdles, or new taxes causing a short fall in financial results.
Pan American Silver turned into a successful buy recommendation in the Fast Money Alert trading service led by Mark Skousen, PhD, and Jim Woods, a seasoned market maven. The duo recommended PAAS on August 27, 2019, advised its sale on February 27, 2020, and produced a potent profit of 24.43% on the stock in just six months.
Ben Franklin scion Mark Skousen, who heads Fast Money Alert and Forecasts & Strategies, talks to Paul Dykewicz.
As a trading service that recommends both stocks and options, Fast Money Alert also instructed its subscribers to buy related January 17, 2020, call options. By the time they advised taking profits, the call options had soared 110.45% in just 125 days.
Jim Woods, a ex-U.S. Army paratrooper, leads Successful Investing and co-heads Fast Money Alert.
The Best Dividend Stocks Nobody is Talking About: Agnico Eagle Mines
Agnico Eagle Mines (NYSE: AEM)
Annual Dividend Yield: 1.81%
The No. 1 gold recommendation of BofA is Agnico Eagle Mines Ltd. (NYSE: AEM), a Toronto, Canada-based company. Agnico Eagle Mines is one of the gold mining stocks that gained a lift after the Federal Open Market Committee's (FOMC) Sept. 18 Fed Funds rate cut of 0.50%, equaling 50 basis points. Prognosticators expect cuts totaling 50 basis points between the remaining two FOMC meetings this year, 100 basis points in 2025 and 50 basis points in 2026 to reach a rate of 2.9% that may hold through 2027.
Some experts suggest that investors have 5-10% of a given portfolio invested in gold. A key reason is that gold acts as an insurance policy for a portfolio, since when everything else goes down, gold tends to go up.
Even though gold is unlikely to produce the stellar returns of a high-flying technology stock, it typically minimizes the downside if a market bubble pops, a geopolitical crisis hits, or some other market catastrophe occurs. The dollars invested in gold mining stocks also can provide investors with dividend payouts. The potential upside is a key reason for compiling a list of the best dividend-paying precious metals stocks to buy for protection from an array of risks. Agnico Eagle Mines has gold mining operations in Canada, Finland, Australia and Mexico. The mining company's exploration and development activities also extend to the United States. The mining company has full exposure to rising gold prices consistent with its policy of no-forward gold sales. Citigroup wrote in a recent research note that it forecasts AEM's 2024 estimated earnings before interest, taxes, depreciation and amortization (EBITDA) to climb 1% to $4.6 billion. The mining company's 2025 estimated EBITDA remains flat at $5.8 billion. The price target that Citigroup has set for AEM is US$80 per share, based on 1.2x price/NAV multiple and Citi's bullish view on gold prices.
Re-investment going forward should climb as projects are built to offset depleting marginal assets, but capital intensity appears relatively modest, Citigroup analysts wrote. The Citi Commodity team remains bullish on gold with its price estimate of $2,400 per ounce in 2024 already exceeded. For 2025, Citi foresees gold prices reaching about $2,900 per ounce, materially increasing earnings estimates even with elevated costs.
Chart courtesy of www.stockcharts.com
The Fast Money Alert trading service also helped its subscribers profit handsomely by recommending AEM options and stock for just two months earlier in 2024. The options soared 144.29%, while the stock price climbed 21.03% before the trading service leaders recommended taking profits. | | | While many folks today are wondering what to do with their money… a revolutionary "sheet" of new technology has quietly sparked an $11 trillion tech revolution.
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One of the big incentives in owning shares in real estate investment trusts (REITs) is that a shareholder does not need to fix any overflowing toilets, patch leaky roofs, repair holes in the walls caused by careless tenants, take complaints about loud neighbors, or carry out smelly garbage in bad weather. Instead, REITs offer a passive investment opportunity to gain exposure to the real estate market and collect dividend payouts without breaking a sweat.
If the Federal Reserve can keep inflation under control and stop the economy from sliding into a recession, REITs should benefit. The following six REITs are among the best performers without receiving much fanfare. Here is a brief description of each.
The Best Dividend Stocks Nobody is Talking About: Welltower Inc.
Welltower Inc. (NYSE: WELL)
Annual Dividend Yield: 2.03%
One of my late grandmother's favorite expressions was "Holy Toledo!" It seems like an apt way to start describing Welltower Inc., a Toledo, Ohio-based based real estate investment trust that works with seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale "innovative care delivery models" and improve people's wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom. Those properties consist of seniors housing, post-acute communities and outpatient medical facilities.
BofA Global Research rates WELL as a buy and gives it a $129 price objective that is derived by running a five-year forward analysis of the REIT's growth prospects under various scenarios. The investment firm's base case implies a share price of $152 in 2028. Then BofA uses a discount rate of 4.28% (based on the 10-year Treasury rate as of February 26, 2024) to calculate its price target.
WELL might be able to top that price target with better-than-expected senior housing or medical office building performance, higher-than-forecast dividend growth and lower interest rates, BofA wrote. Reasons why the price objective might be missed include further public-pay reimbursement cuts, a more competitive acquisitions environment, weaker-than-expected senior housing fundamentals, increased tenant credit risk and a rise in interest rates instead of the current cutting environment.
WellTower's Success Formula Includes a New Operating Platform
BofA's main focus is on WELL's operating platform roll out. The operating platform went live with WELL's first operator in the third quarter.
"We are looking for signs of the uplift at the operator level," BofA analysts wrote in a recent research note. "A qualitative update during the earnings call will help us get a gauge of whether or not 2025 Street estimates are too low."
Anytime an investment firm ranks an equity as a buy and then wonders aloud whether Wall Street consensus earnings estimates are too low, investors can take that as good news that may not be fully reflected in the current share price. Optimism reigns about the soaring prospects for Welltower.
Chart courtesy of www.stockcharts.com
The Best Dividend Stocks Nobody is Talking About: AGNC Investment Corp.
AGNC Investment Corp. (NASDAQ: AGNC)
Annual Dividend Yield: 14.49%
Regulations require REITs to pay their shareholders at least 90% of taxable income, own properties that typically produce reliable rent payments and offer enhanced appeal because they have limited correlation to the stock market. A big fan of REITs as interest rates retreat is Bryan Perry, who leads the Cash Machine investment newsletter.
Perry wrote in his October 2024 issue of Cash Machine that real estate investment trusts, consumer staples and utilities were among those seeing strong inflows of investment capital. He followed up in his November 2024 newsletter to report that his recommendation of AGNC Investment Corp. already is profitable, aided by a dividend yield of 13.89%.
As one of the largest mortgage real estate investment trusts (mREITs), AGNC stands to benefit from potentially tighter mortgage spreads as fixed income volatility eases and rates begin to come down.
Bryan Perry, head of Cash Machine and Quick Income Trader, recommends REITs.
The Best Dividend Stocks Nobody is Talking About: AGNC Analysis
AGNC's business revolves around investing in agency mortgage-backed securities. These investments are underwritten with collateralized borrowings in the form of repurchase agreements (REPOS), Perry explained. Interest is generated from the company's investments, and the difference after paying their borrowing costs is what funds the dividends, he added.
Investing in mREITs that borrow short-term REPOS and are leveraging 30-year investment grade agency mortgage-backed securities in a market where yields are trending lower has historically been a winning trade, as book values tend to rise in this environment, Perry continued. If the Fed does embark on a streak of rate cuts over the next year or so, liquid government debt instruments will appreciate, he wrote in Cash Machine.
With a reduced-rate environment, borrowing costs to service the leverage in the REIT's portfolio are lowered. That should translate into higher profit margins as the REIT locks in yields at current rates, Perry wrote to his subscribers.
"Let's put high long-term mortgage rates to work for us," Perry advised.
Chart courtesy of www.stockcharts.com
The Best Dividend Stocks Nobody is Talking About: Cohen & Steers Realty Shares
Cohen & Steers Realty Shares (MUTF: CSRSX)
Annual Dividend Yield: 2.59%
Bob Carlson, who heads the Retirement Watch investment newsletter, recently recommended Cohen & Steers Realty Shares (CSRSX) to his subscribers to help them profit amid the budding recovery of REITs.
REITs are bouncing back, helped by reduced interest rates and solid growth, Carlson wrote to his Retirement Watch subscribers. In addition, REITs sell at discounts to privately owned real estate and the stock market in general, he added.
CSRSX always has had a focused portfolio and now is seizing opportunities in key sectors, such as telecommunications, data centers and health care, Carlson continued. It is really the most sensible way to invest in artificial intelligence because it concentrates on the infrastructure, he added.
Bob Carlson, head of Retirement Watch, meets with Paul Dykewicz.
The Best Dividend Stocks Nobody is Talking About: Carlson's Call
Traditional commercial real estate is a small part of the fund, including hotels, shopping centers and office buildings. CSRSX dipped 0.91% in the last month, but rose 10.63% in the past three months, 15.69% for the year to date and 40.35% during the last year.
"A big advantage of CSRSX is that it doesn't track an index," Carlson wrote to his newsletter subscribers. "It determines which sectors of commercial real estate are likely to do well in the current economic environment and buys the highest-quality REITs in those sectors. That enables the fund to downplay office buildings, malls, shopping centers, and other lagging sectors in favor of data centers, telecommunications towers, health care and more."
CSRSX also buys relatively few REITs, focusing instead on its managers' best ideas, Carlson continued. Recently, CSRSX held 34 securities with the 10 largest positions, including Welltower, composing 63% of the fund. It offers a current dividend yield of 2.59%.
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Ares Management Corporation (NYSE: ARES)
Annual Dividend Yield: 2.22%
Mark Skousen and Jim Woods, the leaders of the Fast Money Alert advisory service, helped their subscribers earn profits of roughly 18% in about five months by recommending Ares Management Corporation (NYSE: ARES), a global alternative investment manager that offers clients complementary primary and secondary investment opportunities across the credit, real estate, private equity and infrastructure asset classes. ARES offers a modest dividend yield of 2.22%.
The REIT seeks to provide flexible capital to support businesses and create value for its stakeholders and within its communities. By collaborating across its investment groups, the REIT aims to deliver consistent and attractive investment returns throughout market cycles.
RBC Capital recently raised its price target on Ares Management to $170 from $150, while keeping an "outperform rating" on the shares, according to a research note previewing third-quarter results for U.S. Asset Managers. RBC wrote that fixed income organic growth in the sector likely will further improve sequentially during the third quarter.
Ares Management Corporation announced on Oct. 9 that it has priced an offering of $750,000,000 aggregate principal amount of its 5.600% Senior Notes due 2054. The notes will be fully and unconditionally guaranteed by Ares Holdings L.P. and its related business units.
Chart courtesy of www.stockcharts.com
The Best Dividend Stocks Nobody is Talking About: Digital Realty Trust
Digital Realty Trust (NYSE: DLR)
Annual Dividend Yield: 2.94%
Michelle Connell, the head of Portia Capital in Dallas, weeks ago expressed support for Austin, Texas-based Digital Realty Trust (NYSE: DLR), a REIT that benefits from artificial intelligence (AI) and the growing needs of data centers. The REIT rose $15.88 per share, or 9.62%, on Friday, Oct. 25, after its management raised its outlook for funds from operations (FFO) -- a key measure of cash flow -- during the company's latest release of financial results after the close of trading on Thursday, Oct. 24.
DLR is a global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions that recently announced it amended, extended and upsized its existing $3.75 billion senior unsecured multi-currency global revolving credit facility to $4.2 billion. The REIT owns 300 data centers across the world, putting an emphasis on providing sophisticated outsourcing services to companies that do not desire to make the expensive investment in large database centers, Connell counseled. REITs typically do well when interest rates are declining, and that includes DLR, she added.
In addition, due to the critical need for databases, DLR is less economically sensitive compared to other types of REITs, such as malls and hotels, Connell continued. For that reason, Connell said she would expect DLR to be more stable if interest rates are volatile compared to REITs involved with malls and hotels, she added.
"DLR has strong fundamentals," Connell commented.
Michelle Connell heads Portia Capital.
With a dividend yield of 2.94%, DLR has never missed making a payout to its shareholders, Connell continued. The REIT's share price has jumped 11.12% in the past month, 23.65% in the last three months, 37.22% so far this year and 58.93% in the past 12 months.
Connell correctly predicted DLR's share price gain but it only took weeks rather than 12 months for the company to attain it.
Several Wall Street analysts have recently increased their price targets on DLR, added Connell, who advised investors to buy shares on pullbacks.
Chart courtesy of www.stockcharts.com
The Best Dividend Stocks Nobody is Talking About: American Healthcare REIT Inc.
American Healthcare REIT Inc. (NYSE: AHR)
Annual Dividend Yield: 3.89%
BofA Global Research rates American Healthcare REIT Inc. (NYSE: AHR) as a buy and put the REIT on its elite "US1 list." The investment firm was so impressed with AHR that it wrote that there is room for heightened financial guidance from the REIT's management.
"We believe the exercise of the Trilogy purchase option offers benefits beyond the initial accretion," BofA wrote. "Further education on how Trilogy can drive earnings growth will drive a re-rating higher in the stock, in our view. Across the sector, acquisition volumes and cap rates were ahead of our expectations last quarter."
American Healthcare REIT Inc. received a $31 price objective from BofA, which applied a 24.5x adjusted funds from operations (AFFO) multiple to the investment firm's 2025 AFFO estimate.
"Our applied multiple is based on AHR's relative mix of health care real estate exposure and our view on its portfolio quality relative to publicly traded peers," BofA explained. "For AHR, our main focus is on reimbursement dynamics following CMS [Centers for Medicare and Medicaid] star rating print of Medicare Advantage plans and if this shifts Trilogy's payor mix going forward (shifting towards more Medicare vs Medicare Advantage). We are also focused on how Trilogy offers benefits to AHR beyond just initial accretion."
AHR recently acquired the remaining minority interest in Trilogy Holdings, becoming the sole owner of Trilogy Holdings and its Integrated Senior Health Campuses. However, BofA wrote that AHR's reliance on Trilogy and government reimbursement adds risk due to exposure to the skilled nursing facility sector.
Chart courtesy of www.stockcharts.com
The Best Dividend Stocks Nobody is Talking About: Geopolitical Risk is Rising
Geopolitical risk is on the rise with the conflict in the Middle East expanding and Russia intensifying its military attacks against neighboring Ukraine. The murderous rampage of Hamas terrorists on October 7, 2023, included raping and decapitating innocent civilians who were attacked at a music concert and in their homes in Israel.
"More than 1,200 men, women and children, including 46 Americans and citizens of more than 30 countries, were slaughtered by Hamas – the largest massacre of Jews since the Holocaust," said U.S. Secretary of State Antony Blinken in a statement on the one-year anniversary of the invasion. "Girls and women were sexually assaulted. The depravity of Hamas's crimes is almost unspeakable.
"Hamas also took 254 people hostage that day, including 12 Americans. Four of those Americans – Hersh Goldberg-Polin, Itay Chen, Judy Weinstein, and Gad Haggai – were murdered by Hamas. Four were released through an agreement the United States negotiated last November, but four remain in captivity in Gaza: Edan Alexander, Keith Siegel, Sagui Dekel-Chen and Omer Neutra. There are also an estimated 97 other hostages who remain held in Gaza today. They include men, women, young boys, young girls, two babies and elderly people from more than 25 nations. Hamas should release these hostages immediately. Every single one of them, including all seven American hostages, must be returned to their families, and the United States will continue to work tirelessly to bring them home."
Russia's abuse of Ukrainians also includes inhumane treatment, sexual assaults against both men and women, torture and gruesome murders. The Ukrainian people continue to fight to defend their freedom, but recent news reports indicate that Russia is recruiting North Koreans to join their side in a war in which it already outnumbers those from the much smaller country it invaded on February 24, 2022.
Amid those heart-breaking reports of inhumanity, the best dividend stocks nobody is talking about offer investors ways to protect their portfolios by profiting from the Fed's planned rate cuts. The high likelihood of multiple rate cuts for the next 12-18 months puts these positions in a positive light for those seeking to enhance their investment returns with rising share prices and attractive dividend payouts. | | | Sincerely,
Paul Dykewicz, Editor
DividendInvestor.com
| | About Paul Dykewicz: Paul Dykewicz is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul also is the author of an inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain", with a foreword by former national championship-winning football coach Lou Holtz. Follow Paul on Twitter @PaulDykewicz. | | | | | |
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