AMC Completes At the Market Equity Program

TipRanks

2 Big Dividend Stocks Yielding at Least 7%; Raymond James Says ‘Buy’

For investors seeking a strong dividend player, there are some market segments that are known for their high-yield dividends, making them logical places to start looking for reliable payers. The hydrocarbon sector, oil and gas production and mainstreaming, is one of these. The sector deals in a products that’s essential – our world runs on oil and its by-products. And while overhead for energy companies is high, they still have a market for their deliverables, leading to a ready cash flow – which can be used, among other things, to pay the dividends. All of this has investment firm Raymond James looking to the roster oil and gas midstream companies for dividend stocks with growth potential. “We anticipate the [midstream] group will add around ~1 turn to its average EV/EBITDA multiple this year. This equates to a ~20-25% move in equity value,” Raymond James analyst Justin Jenkins noted. Jenkins outlined a series of points leading to a midstream recovery in 2021, which include the shift from ‘lockdown’ to ‘reopen’ policies; a general boost on the way for commodities, as the economy picks up; a political point, that some of DC’s more traditional centrists are unlikely to vote in favor of anti-oil, Green New Deal policies; and finally, with stock values relatively low, the dividend yields are high. A look into the TipRanks database reveals two midstream companies that have come to Raymond James’ attention – for all of the points noted above. These are stocks with a specific set of clear attributes: a dividend yield of 7% or higher and Buy ratings. MPLX LP (MPLX) MPLX, which spun off of Marathon Petroleum eight years ago as a separate midstream entity, acquires, owns, and operates a series of midstream assets, including pipelines, terminals, refineries, and river shipping. MPLX’s main areas of operations are in the northern Rocky Mountains, and in the Midwest and stretching south to the Gulf of Mexico coast. Revenue reports through the ‘corona year’ of 2020 show the value potential of oil and gas midstreaming. The company reported $2.18 billion at the top line in Q1, $1.99 billion in Q2, and $2.16 billion in Q3; earnings turned negative in Q1, but were positive in both subsequent quarters. The Q3 report also showed $1.2 billion in net cash generated, more than enough to cover the company’s dividend distribution. MPLX pays out 68.75 cents per common share quarterly, or $2.75 annualized, which gives the dividend a high yield of 11.9%. The company has a diversified set of midstream operations, and strong cash generation, factors leading Raymond James’ Justin Jenkins to upgrade his stance on MPLX from Neutral to Outperform (i.e. Buy). His price target, at $28, implies a 22% one-year upside for the shares. (To watch Jenkins’ track record, click here) Backing his stance, Jenkins writes, “Given the number of ‘boxes’ that the story for…