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5 High-Yield Stocks to Defy Coronavirus-Led Crisis in April

Zacks Equity Research

With cities under lockdown and factories closed due to the coronavirus outbreak, stocks have been recording steep declines. In fact, benchmarks including the S&P 500 Index fell 12.5%, while the DOW and the Nasdaq declined 13.7% and 10.1%, respectively in the past 30 days

The rapid spread of the virus in the absence of a cure or vaccination raises investor concern about the U.S. economic outlook. Millions will be facing unemployment and businesses have to strive hard to address liquidity and solvency issues. On Mar 31, the Conference Board reported that the index of consumer confidence fell to 120 in March from a revised 132.6 in February, a 32-month low. Consumers are rapidly losing confidence in the economy as the deadly virus wreaks havoc.

Investors have been looking for safe investment options as the economic impact of coronavirus keeps growing. High-yield stocks are in focus in times of crisis like the current one, as high dividend payout ratio of these companies will offer a constant income stream. Along with that the Federal Reserve’s two emergency rate cuts in March have brought interest rates to 0-0.25%. Now, with loans available at cheaper rates, the flow of money is expected to continue at these dividend-paying companies.

5 Top Dividend Players to Buy

Given the current turmoil in the global market caused by the steep rise in COVID-19 cases, we have shortlisted five high-yield stocks that can return well at the time of crisis.

Our first choice is Enviva Partners, LP EVA that produces and sells utility-grade wood pellets. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Biofuels industry’s projected earnings growth of 40.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 29% upward over the past 60 days.

Enviva Partners, a Zacks Rank #1 (Strong Buy) company, has a dividend yield of 9.7%, and its five-year average dividend yield is 8.6%.You can see the complete list of today’s Zacks #1 Rank stocks here.

Real estate investment trust MGM Growth Properties LLC MGP also make it to our list. The company is engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts. The company’s expected earnings growth rate for the current year is 5.6% against the ZacksREIT and Equity Trust - Otherindustry’s projected earnings decline of 0.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.7% upward over the past 60 days.

MGM Growth Properties, a Zacks Rank #1 company, has a dividend yield of 7.9%, and its five-year average dividend yield is 5.5%.

Next we have, Chimera Investment Corporation CIM that invests in a portfolio of mortgage assets. The company’s expected earnings growth rate for the next year is 5.2% compared with the Zacks REIT and Equity Trust industry’s projected earnings growth of 4.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 2.9% upward over the past 60 days.

Chimera Investment, a Zacks Rank #1 company, has a dividend yield of 19.3%, and its five-year average dividend yield is 11.6%.

DCP Midstream, LP DCP owns, operates, acquires and develops a portfolio of midstream energy assets in the United States. The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Oil and Gas - Production and Pipelines industry’s projected earnings decline of nearly 19%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 18.6% upward over the past 60 days.

DCP Midstream, a Zacks Rank #2 (Buy) company has a dividend yield of 93.1%, and its five-year average dividend yield is 9.8%.

Last on our list is Teekay LNG Partners L.P. TGP, amarine transportation service provider for liquefied natural gas, liquefied petroleum gas and crude oil worldwide. The company’s expected earnings growth rate for the current year is 54.2% compared with the Zacks Transportation - Shipping industry’s projected earnings growth of 8.2%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.6% upward over the past 60 days.

Teekay LNG Partners, a Zacks Rank #2 company has a dividend yield of nearly 8%, and its five-year average dividend yield is 5.6%.

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Teekay LNG Partners L.P. (TGP) : Free Stock Analysis Report
 
Chimera Investment Corporation (CIM) : Free Stock Analysis Report
 
Enviva Partners, LP (EVA) : Free Stock Analysis Report
 
MGM Growth Properties LLC (MGP) : Free Stock Analysis Report
 
DCP Midstream Partners, LP (DCP) : Free Stock Analysis Report
 
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