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3 Top Dividend Stocks With Growth Opportunity; Goldman Sachs Says ‘Buy’

Investing is all about finding profits, and investors have long seen two main paths toward that goal. Growth stocks, equities that will give a return based mainly on share price appreciation, are one route. The second route lies through dividend stocks. These are stocks that pay out a percentage of profits back to shareholders – a dividend, usually sent out quarterly. The payments vary widely, from less than 1% to more than 10%, but the average, among stocks listed on the S&P 500, is about 2%. Dividends are a nice addition for a patient investor, as they provide a steady income stream. Goldman Sachs analyst Caitlin Burrows has been looking into the real estate trust segment, a group of stocks long-known for dividends that are both high and reliable – and she sees plenty of reason to expect strong growth in three stocks in particular. Running the trio through TipRanks’ database, we learned that all three have been cheered by the rest of the Street as well, as they boast a “Strong Buy” analyst consensus. Broadstone Net Lease (BNL) First up, Broadstone Net Lease, is an established REIT that went public this past September in an IPO that raised over $533 million. The company put 33.5 million shares on the market, followed by another 5 million-plus picked up by the underwriters. It was considered a successful opening, and BNL now boasts a market cap over $2.63 billion. Broadstone’s portfolio includes 628 properties across 41 US states plus the Canadian province of British Columbia. These properties host 182 tenants and are worth an aggregate of $4 billion. The best feature here is the long-term nature of the leases – the weighted average remaining lease is 10.8 years. During the third quarter, the most recent with full financials available, BNL reported a net income of $9.7 million, or 8 cents per share. The income came mainly from rents, and the company reported collecting 97.9% of rents due during the quarter. Looking ahead, the company expects $100.3 million in property acquisitions during Q4, and an increased rent collection rate of 98.8%. Broadstone’s income and high rent collections are supporting a dividend of 25 cents per common share, or $1 annually. It’s a payment affordable for the company, and offering investors a yield of 5.5%. Goldman’s Burrows sees the company’s acquisition moves as the most important factor here. “Accretive acquisitions are the key earnings driver for Broadstone… While management halted acquisitions following COVID-induced market uncertainty (BNL did not complete any acquisitions in 1H20) and ahead of its IPO, we are confident acquisitions will ramp up in 2021, and saw the beginning of this with 4Q20 activity… We estimate that BNL achieves a positive investment spread of 1.8%, leading to 0.8% of earnings growth (on 2021E FFO) for every $100mn of acquisitions (or 4.2% on our 2021E acquisition…