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2 Compelling Dividend Stocks Yielding at Least 8%; Oppenheimer Says ‘Buy’

The crises of the past year – the COVID pandemic, the social lockdowns, the economic shock – are on the wane, and that’s good. However, the crisis post-mortems are rolling
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The crises of the past year – the COVID pandemic, the social lockdowns, the economic shock – are on the wane, and that’s good. However, the crisis post-mortems are rolling in.

It’s only natural to compare the current economic crisis to the ‘Great Recession’ of 12 years ago, but as Oppenheimer’s chief investment strategist John Stoltzfus points out, “Considering the differences in what caused the Great Financial Crisis of a little more than 12 years ago… and the current crisis… it’s little wonder that as good as things are when compared to this time last year there remains much to be revealed as to how the exit and the legacy of the pandemic crisis will take shape…”

Stoltzfus also believes that the economic data, while suffering some setbacks, is generally resilient. Markets are rising, and that, as Stoltzfus says, “…in our view likely presents more opportunity than risk for investors who have suitable tolerance for risk and who practice patience.”

Taking Stoltzfus’ outlook into consideration, we wanted to take a closer look at two stocks earning a round of applause from Oppenheimer's stock analysts. Using TipRanks’ database, we learned that both share a profile: a Strong Buy consensus rating from the Street’s analyst corps and a reliable dividend yielding at least 8%. Let’s see what Oppenheimer has to say about them.

Owl Rock Capital (ORCC)

We’ll start with Owl Rock Capital, one of the financial industry’s myriad specialty finance companies. These companies generally inhabit the middle-market finance sector, where they make available capital for acquisitions, recapitalizations, and general operations to mid-market companies that don’t necessarily have access to other sources of credit. Owl Rock’s portfolio consists of investments in 119 companies, totaling $11.3 billion. Of these investments, 96% are senior secured loans.

Owl Rock reported its 4Q20, and full year results, at the end of February. The company saw Q4 net income of $180.7 million, which came out to 46 cents per share. This was up from 36 cents per share in 4Q19, a 27% increase. Also up was investment income, which at $221.3 million for the quarter was up 9% year-over-year. Full-year investment income was $803.3 million, up more than 11% from 2019. In addition, the company finished 2019 with over $27 billion in assets under management.

Of particular interest to dividend investors, Owl Rock’s board declared a 31-cent per common share dividend for the first quarter. This is payable in mid-May, and matches the company’s previous regular dividend payments. The annualized rate of $1.24 gives a yield of 9%.

Also of interest about Owl Rock’s dividend, the company paid out the sixth and final special dividend – related to the 2019 IPO launch – in this past December. In 2019, ORCC paid out for 80 cent special dividends, along with the regular dividend payments. The company has kept its dividend reliable, meeting both the regular and special payments, since going public in the summer of 2019.

Owl Rock caught the attention of Oppenheimer’s Mitchel Penn, who sees the company as a solid investment with potential to beat the estimates.

"We estimate EPS of $1.22 and $1.34 in 2021 and 2022 for an ROE of 8% and 9%, respectively. We project that Owl Rock can earn a 8.5% ROE, and given an estimated cost of equity capital of 8.5% we calculate a fair value of $15/share or 1.02x book value," Penn noted. "To achieve an 8.5% ROE, ORCC will either need to increase its portfolio yield from 8.4% to 9.0% or increase its leverage from 1x to 1.2x. It’s also possible that it does a little of both. Our model accounts for the fee expense increase from a flat 75 bps to a base fee of 1.5% on assets and an incentive fee of 17.5% on income."

Penn rates this stock an Outperform (i.e., a Buy), and his $15 price target suggest a 7% upside potential from current levels. The dividend yield, however, is the true attraction here (To watch Penn’s track record, click here.)

ORCC shares have attracted 3 recent reviews, and all are to Buy – which makes the Strong Buy consensus rating unanimous. This stock is selling for $13.98 per share and has an average price target of $14.71. (See ORCC stock analysis on TipRanks)

Fidus Investment Corporation (FDUS)

Sticking with the mid-market finance sector, we’ll take a look at Fidus Investment. This company, like Owl Rock, offers capital access to smaller firms, including access to debt solutions. Fidus has a portfolio that is based mainly on senior secured debt, along with mezzanine debt. The company that Fidus has invested in are valued between $10 million and $150 million.

In the fourth quarter, rounding out 2020, Fidus invested in seven companies new to its portfolio, putting a total of $103.9 million into the investments. The company’s portfolio, for that quarter, brought in an adjusted net investment income of $10.7 million, or 25 cents per common share. This was up 3 cents, or 13%, year-over-year. For the full year 2020, the adjusted net income reached $38 million, up from $35.3 million in 2019. Per share, 2020’s $1.55 was up 7.6% yoy.

Fidus’ shares have been climbing steadily in the past year. Since last April, the stock has gained an impressive 153%. This gives FDUS a solid share appreciation, to complement the dividend returns.

Those dividends are substantial. The company declared its 1Q21 payment in February, and paid out on March 26. The regular payment, at 31 cents per common share, yields 8% with an annualized payout of $1.24. In addition to this regular payment, Fidus also declared a special dividend of 7 cents per share, nearly double the 4-cent special payment made in the previous quarter.

Turning now to the Oppenheimer coverage on Fidus, we find that 5-star analyst Chris Kotowski is pleased with this company, enough to rate it an Outperform (i.e. Buy) with an $18 price target. This figure suggests a 15% one-year upside. (To watch Kotowski’s track record, click here)

“The fundamentals [are] stable with debt investments at year-end essentially stable and interest income in line with both the prior quarter and our estimate…. What we are most pleased about is that we ended the year with only one small non-accrual. There was a significant loss during the year on one credit, which was crystallized in 4Q20, but there were also equity gains in 1Q20 that offset that, and in our mind, the fact that we end a year like this with minimal net losses validates FDUS's business model.”

Of Fidus’ dividend policy, maintaining a base payment with special dividends added on when possible, Kotowski writes simply, “We think a variable dividend makes a world of sense.”

Like ORCC above, this is a stock with a unanimous Strong Buy consensus rating based on 3 recent positive reviews. Fidus’ shares are selling for $15.70 and their $17.17 average price target indicates a 9% upside potential from that level. (See FDUS stock analysis on TipRanks)

To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured 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.

The post 2 Compelling Dividend Stocks Yielding at Least 8%; Oppenheimer Says 'Buy' appeared first on TipRanks Financial Blog.

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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Uncategorized

February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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