March NY world sugar #11 (SBH24 ) on Tuesday closed up +0.38 (+1.61%), and March London ICE white sugar #5 (SWH24 ) closed up +0.60 (+0.09%). Sugar prices on Tuesday recovered from early losses and closed moderately higher as a weaker dollar sparked short covering in sugar futures after three...
A new actively managed growth ETF called the CastleArk Large Growth ETF (
NYSEARCA:CARK
) just launched in December. This new ETF looks promising based on its strong, concentrated portfolio of holdings, which feature Outperform-rated TipRanks Smart Scores, implying that the ETF can beat the market. Based on these factors, I'm bullish on CARK.
What is the CARK ETF’s Strategy?
CARK was launched by CastleArk in December and has accrued $324.8 million in assets under management (AUM) so far. CastleArk is new to the ETF world but has extensive experience in separately managed accounts and collective trusts. Its large-cap growth strategy for these vehicles, called CastleArk U.S. Large Cap Growth, has delivered an annualized 14.2% return, net of fees, over the past decade.
CARK is an actively-managed ETF in the same vein as this large-cap growth strategy. CARK seeks “long-term capital appreciation through a concentrated growth portfolio of predominantly U.S companies having market capitalizations greater than $4 billion at time of purchase.”
After starting with an initial investment universe of 1,000 stocks, the portfolio management team seeks to create a highly concentrated portfolio of 20-30 stocks. CastleArk says, “The investment team seeks to invest in businesses possessing a superior franchise, potentially making them more immune to disruption and possibly allowing them to generate sustainable growth, high profitability, and abundant free cash flow.”
While many growth funds look to invest in "disruptors," CARK's portfolio managers favor large and established firms and believe that the market often overestimates the potential of new, early-stage incumbents to disrupt these established leaders.
The key drivers that CARK is looking for in the businesses it invests in are profitability, industry structure, and free cash flow generation. It believes that these factors play a bigger role than revenue growth in driving medium- to long-term performance. CARK also prizes firms with leading market positions that possess characteristics including robust brand loyalty, proprietary technology and patents, high switching costs, logistical advantages, substantial capital requirements, economies of scale, network effects, and more.
Essentially, CARK isn't going to invest in every hot
growth stock that comes along that may be a flash in the pan, but it will invest heavily in established market leaders that demonstrate sustainable, profitable growth over the long term, such as Microsoft (
NASDAQ:MSFT
) and Nvidia (
NASDAQ:NVDA
), which we'll delve into further in the portfolio section.
Portfolio Management Team
The portfolio is managed by an experienced team of three investment managers. This includes Jerome Castellini, the co-founder and co-CIO of CastleArk, who has over 40 years of investment experience and has been with the firm since 1999; CastleArk co-CIO Dan Becker, CFA, who has over 30 years of investment experience; and Quentin Ostrowski, CFA, who has over 35 years of investment experience and more than 20 years at CastleArk.
A Portfolio of Top Notch Smart Score Stocks
CARK holds just 25 stocks, and its top 10 holdings account for nearly two-thirds of the fund, so this is not a very diversified ETF. However, in fairness to CARK, diversification is not really the point of the fund, as it is a concentrated, actively-managed bet on large growth leaders. Below is an overview of
CARK’s top 10 holdings using TipRanks’ holdings tool. One thing you’ll immediately note about CARK’s holdings is that they collectively feature fantastic Smart Scores across the board.
The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. The score is data-driven and does not involve any human intervention.
Six of the eight market factors that are incorporated into the Smart Score calculation are unique to TipRanks. The factors include Wall Street analyst ratings, corporate insider transactions, financial blogger opinions, individual investor sentiment, news sentiment, hedge fund manager activity, technicals, and fundamentals. A score of 8 or above is equivalent to an Outperform rating.
Remarkably, all 10 of CARK’s top 10 holdings feature Outperform-equivalent Smart Scores of 8 or higher. Alphabet (
NASDAQ:GOOGL
), Meta Platforms (
NASDAQ:META
), Dexcom (
NASDAQ:DXCM
), and Eli Lilly (
NYSE:LLY
) all feature 'Perfect 10' Smart Scores, while Microsoft, Nvidia, Amazon (
NASDAQ:AMZN
), and Mastercard (
NYSE:MA
) all feature Smart Scores of 9.
While none of these
mega-cap growth names are exactly what one would call diamonds in the rough, CARK features some interesting, less ubiquitous names (as far as large-cap stocks go) outside of its top 10 holdings.
These include stocks such as Lam Research (
NASDAQ:LRCX
), ASML Holding N.V. (
NASDAQ:ASML
), and Applied Materials (
NASDAQ:AMAT
), all of which have strong moats as makers of
semiconductor manufacturing equipment, and all of which boast Outperform Smart Scores as well. Lam Research and ASML both enjoy 10 out of 10 Smart Scores, while Applied Materials scores an 8.
Other strong holdings include medical device makers Stryker Corp. (
NYSE:SYK
) and Intuitive Surgical (
NASDAQ:ISRG
), which feature Smart Scores of 9 and 10, respectively.
CARK itself features a venerable ETF Smart Score of 9. This puts CARK in rare company as one of just 14 ETFs out of the 3,300+ in
TipRanks’ ETF database with an ETF Smart Score of 9 or better.
Is CARK Stock a Buy, According to Analysts?
Turning to Wall Street, CARK earns a Moderate Buy consensus rating based on 25 Buys, one Holds, and zero Sell ratings assigned in the past three months. The
average CARK stock price target of $33.30 implies 9.7% upside potential.
What Is CARK's Expense Ratio?
CARK has an expense ratio of 0.54%. While this isn’t great, it isn’t out of line with other actively managed ETFs, and many are more expensive than CARK. This expense ratio means an investor will pay $54 in fees annually on a $10,000 investment in CARK. Assuming the fund maintains this expense ratio moving forward and returns 5% per year going forward, an individual investing $10,000 into the fund would pay $173 in fees over a three-year time frame.
Investor Takeaway
CARK is new, so it hasn’t established a track record of performance yet, which will be important to watch over time. However, it looks promising, and I’m bullish on the concentrated ETF based on its strong portfolio of holdings, which all feature top-notch Smart Scores.
Disclosure
Alibaba (
NYSE:BABA
), the Chinese tech giant, disappointed investors in 2023 while many of its American counterparts delivered strong returns. Alibaba stock has declined almost 40% in the last 12 months, but new catalysts have emerged to drive the stock higher in 2024. Although regulatory risks need to be monitored carefully, I am bullish on Alibaba stock.
SoftBank Finally Completes Divesting Alibaba
SoftBank (
OTC:SFTBF
), the Japanese investment firm led by billionaire Masayoshi Son, was one of the first institutional investors to believe in Alibaba. The investment firm invested $20 million in Alibaba in 2000. In late 2021, SoftBank entered into a forward contract with its subsidiary Skybridge to divest its Alibaba stake. This contract allowed SoftBank to repurchase Alibaba shares from Skybridge if needed.
On January 25, SoftBank announced the settlement of these prepaid forward contracts with Skybridge, reportedly booking a profit of around $8.5 billion from its investment in Alibaba. The investment firm has decided not to purchase or sell any new Alibaba shares in the foreseeable future. The firm currently owns a minor stake in Alibaba of approximately 0.5%, in contrast to an ownership stake of 32% back in 2021.
From a technical perspective, the massive selling pressure created by SoftBank over the last couple of years acted as a barrier for Alibaba stock to trend higher despite the company spending massive amounts on share buybacks. For reference, the company spent $10.2 billion on stock repurchases in the last 12 months.
Going forward, it seems reasonable to assume that buybacks will finally create a positive impact, assuming the company continues to perform well financially.
The Founder and President Are Betting on Alibaba
On January 23, SEC filings revealed that Alibaba founder Jack Ma and current Chairman Joe Tsai
both purchased company shares, indicating their improving sentiment toward the company’s prospects at a time when SoftBank is exiting its investment. Mr. Ma purchased Alibaba shares worth $50 million, while Mr. Tsai invested $151 million in the company through his family investment fund.
Following these transactions, Jack Ma and Joe Tsai became the two largest shareholders of the company, ending SoftBank’s reign that spanned several years. The founding members’ return as largest shareholders is likely to boost investor sentiment in the coming months, which was evident from the initial market reaction on January 23, when Alibaba stock jumped more than 7% following the release of SEC filings highlighting these transactions.
Alibaba Enjoys a Long Runway to Grow
Alibaba’s investment appeal stems from two factors: the long growth runway enjoyed by the company and its cheap valuation.
Alibaba has emerged as a leader in the cloud computing space in China, which is a market that is expected to grow exponentially in the next few years, with companies of all scales and sizes moving to the cloud. According to
Canalys data, Alibaba Cloud accounted for 34% of the cloud market in China at the end of Q1 2023, with Huawei Cloud in second place with a market share of 20%.
According to
Statista, revenue in the Chinese public cloud sector will grow at a CAGR of 18.7% through 2028, resulting in a market value of $137 billion at the end of the forecast period. The ongoing integration of AI capabilities in the cloud market will be one of the key growth drivers in the next five years.
Alibaba enjoys quantifiable pricing power in this market segment, and the company has reported consistently higher renewal rates compared to many of its peers. These observations suggest that Alibaba is well-positioned to make the most of the expected growth in the cloud market.
The company is integrating AI into its digital retail technologies, including the development of unified core technology and solving language translation challenges. In the digital media entertainment segment, the company is using AI to create next-generation content and to achieve process-based digitalized film and TV show production capabilities.
Although a full business separation may not be in the cards anymore, Alibaba continues to find ways to manage its business units independently, which should enable the company to unlock hidden value in the coming years. This will be another growth driver.
At a more granular level, the company has come up with ambitious visions for each of its key business segments. Examples include 1688 aiming to leverage products manufactured in China with business customers in mind, Xianyu seeking to become a lifestyle platform without limiting itself to secondhand goods, DingTalk aiming to become the best AI smart assistant system in China, Quark targeting students to sell its knowledge products, and Youku committing to prioritize self-produced content to compete in the video content niche.
Is Alibaba Stock a Buy, According to Wall Street Analysts?
Based on the ratings of 20 Wall Street analysts, BABA stock comes in as a Strong Buy. The
average Alibaba stock price target is $118.20, which implies upside potential of 63.4% from the current market price.
Alibaba is trading at a meaningful discount to its historical valuation multiples and also compared to its American counterparts. The company is valued at a forward P/E of 8.2 compared to its five-year average forward P/E of 18.15. To add more context, Amazon (
NASDAQ:AMZN
) is trading at a forward P/E of 59.4.
Alibaba’s cheap valuation has attracted many Wall Street bulls in recent months, but its stock has not performed up to expectations due to investor worries about Chinese regulators and other macroeconomic factors.
The Takeaway: Alibaba Stock Is Closer to Turning a Corner
Alibaba has remained cheaply valued for about two years. Today, new catalysts have emerged to drive the stock higher in the form of SoftBank completing its planned divestment of Alibaba shares and the improving regulatory improvement. The company seems attractively valued for long-term-oriented investors at a time when tables are turning in favor of the company both from a regulatory and financial performance perspective.
Disclosure
In this piece, I
evaluated two fintech stocks, Block (
NYSE:SQ
) and SoFi Technologies (
NASDAQ:SOFI
), using TipRanks' comparison tool to see which is better. A closer look suggests a neutral view for Block and a bullish view for SoFi.
Previously known as Square, Block provides payment-processing solutions for credit cards, including point-of-sale software and hardware. Meanwhile, SoFi Technologies offers lending and financial services products, including home, student, and personal loans. It also provides related technology products and solutions.
Shares of Block are down 11% year-to-date, although they're up 71% over the last three months. Despite that recent rally, the stock is off 16% over the last year. Meanwhile,
SoFi shares are down 8% year-to-date after Monday's 20% pop but are up 21% over the last three months, bringing their one-year return to 32%.
Block (NYSE:SQ)
While Block was profitable in 2021, it took a bit of a detour by diverting significant attention away from its healthy and growing payment processing businesses and toward blockchain and Bitcoin (
BTC-USD
), even changing its name to reflect that diversion. As such, Block looks like a bit of a wait-and-see story, so a neutral view seems appropriate.
Unfortunately, Block's Bitcoin diversion is triggering extreme movements in its financial results, which is a tough pill for many investors to swallow. For example, the company's CashApp revenue rose 34% year-over-year in the third quarter, but it was up only 26% when excluding Bitcoin trading.
More importantly, there's been significant insider selling in Block shares recently. Although TipRanks shows
Informative Buy transactions of $26.5 million over the last three months, all of that is from a single transaction three months ago. More recently, we've begun to see insiders sell off some shares, although those sales just haven't been enough to offset that sizable $26.5 million non-open-market purchase three months ago.
These were Auto Sell transactions, which aren't included in the Informative Sells total. Insiders often establish preset trading plans with prices at which to automatically sell their company's stock. Thus, a rising number of Auto Sell transactions, especially as a stock price increases like Block shares have over the last three months, suggests that insiders don't see anymore upside left in the near term.
As Citi analysts noted recently,
Block shares have been range-bound between $50 and $90 for the last 20 months. While downside could indeed be limited in the near term, as Citi suggested, I would argue that significant upside also appears limited, at least for now.
However, Block could be worth monitoring for any significant positive change, signaling that things are changing for the better. Once Block gets its financial house in order, meaning GAAP (generally accepted accounting principles) profitability alongside steady growth with less dependence on Bitcoin for growth, its stock price could take off, as it's certainly cheap on a historical basis.
What Is the Price Target for SQ Stock?
Block has a Strong Buy consensus rating based on 26 Buys, six Holds, and zero Sell ratings assigned over the last three months. At $79.76, the
average Block stock price target implies upside potential of 16.9%.
SoFi Technologies (NASDAQ:SOFI)
For SoFi Technologies, the big story on Monday was its
fourth-quarter earnings results, which revealed its first quarterly profit since going public. Although SoFi shares have risen a lot on the earnings news, the company looks like a long-term buy-and-hold position, especially as interest rates fall, encouraging consumers to take out more loans.
First, it should be noted that SoFi's profits were on a GAAP basis, while Block is only
profitable on a non-GAAP or adjusted basis. GAAP profitability represents true profits because it includes all those little (or sometimes large) extra items that get excluded from analyst estimates. Thus, while Block has been profitable on an adjusted basis, GAAP profitability is what's critical because it shows the true state of a business.
On Monday, before the opening bell, SoFi Technologies reported GAAP net revenue of $615 million, up 35% year-over-year, and $594 million in adjusted net revenue, up 34%. The company's adjusted EBITDA rose 159% year-over-year to $181 million, and it achieved its target adjusted EBITDA margin of 30%.
SoFi also reported GAAP net income of $48 million or 2 cents per share in earnings, versus the
consensus estimate of less than 1 cent per share, and added almost 585,000 new members, raising its total member count 44% year-over-year. Overall, Monday's print was essentially perfect, with all three of the company's segments being profitable on a contribution basis.
What Is the Price Target for SOFI Stock?
SoFi Technologies has a Hold consensus rating based on six Buys, zero Holds, and zero Sell ratings assigned over the last three months. At $9.33, the
average SoFi Technologies stock price target implies upside potential of 10.5%.
Conclusion: Neutral on SQ, Bullish on SOFI
While things could change suddenly for Block or SoFi Technologies, tipping either of them one way or the other, as things stand now, SoFi looks like a long-term buy-and-hold stock. It also remains well below the roughly $25/share price notched in February 2021 — just months after its initial public offering when it was unprofitable with no sign of future profits.
On the other hand, Block needs to refocus on what's really important, which is its payment processing business. Until it does that, its earnings results may be choppy and volatile, just like
Bitcoin's price.
Disclosure
Pixelworks (
NASDAQ:PXLW
) is usually a
penny stock that few folks talk about. Suddenly, however, Pixelworks is interesting to a lot of traders, making the share price surge. I typically look for dip-buying opportunities, but I am bullish on PXLW stock due to some fresh and exciting news about the company.
Pixelworks provides content creation, video delivery, and display processing solutions. The company's TrueCut Motion platform enables video creators to create crisp, visually stunning content. Speaking of video content, Pixelworks just inked a deal with a world-famous entertainment company that could make great videos even better and could make early investors a lot of money.
A Major Coup for Pixelworks
If you're a video content specialist, can you do any better than scoring a deal with the one and only Walt Disney (
NYSE:DIS
)? I think the answer is no, and it's certainly a major coup for Pixelworks to enter into a deal with this entertainment industry giant.
Here's the scoop. I already mentioned Pixelworks' flagship product, the TrueCut Motion platform. In a fresh announcement, Pixelworks disclosed that it will work with Disney to "bring a collection of TrueCut Motion
TM graded titles to select home entertainment devices."
The press release didn't specify these titles, unfortunately. Hopefully, we'll soon find out which films, television programs, and/or other titles will get the TrueCut Motion treatment.
The idea, apparently, is to improve the overall visual quality of these titles. Specifically, Pixelworks' TrueCut Motion technology can help to eliminate "motion playback anomalies" and maintain the "desired brightness levels" of video content, "all while preserving the authentic cinematic motion look and feel of the source."
By the way, Pixelworks also looks reasonably solid as a business, with or without the Disney partnership. The company's
third-quarter 2023 revenue increased by 18% sequentially to $16 million, and Pixelworks has a good track record of beating
Wall Street's quarterly EPS estimates.
Is PXLW Stock a Buy, According to Analysts?
On TipRanks, PXLW comes in as a Moderate Buy based on two Buy ratings assigned by analysts in the past three months. The
average Pixelworks stock price target is $14, implying 735.8% upside potential.
Conclusion: Should You Consider PXLW Stock?
Pixelworks stock jumped over 60% today at one point on the Disney deal news before eventually pulling back. Nevertheless, the rally doesn't have to end here. Pixelworks demonstrated revenue growth and earnings beats even before the Disney partnership. Therefore, I am considering PXLW stock for a possible small-sized long position.
Disclosure
A triple digit push left the front month hog futures 0.3% to 1.8% higher, though Feb closed up by just 57 cents for the day. Tuesday’s PM National Average Base Hog price was $59.40 with no comparison to Monday given confidentiality rules. The 1/26 CME Lean Hog Index was up...
Front month feeder cattle closed with triple digit gains on Tuesday of as much as 1.1%. futures settled the session $1.82 to $2.70 in the black. Live cattle futures were also in the black for the close, though gains were limited to 0.4% across the front months. USDA’s confirmed cash...
Tuesday’s cotton futures ended the session 17 to 52 points in the black led by March. Futures had paused their bull spreading intra-crop year on Monday and early on Tuesday, but the old-new crop spread was back to 351 points going home on Tuesday. The Cotlook A Index was 130...
Soy futures traded higher on Tuesday with 1.3% to 2% gains for the beans, 2% to 2.5% gains for the meal and 0.7% to 1% gains for the oil. The front month soybeans had settled Tuesday with a lower low, a higher high and a net 15 to 24 ½...
After printing new contract lows in the overnight trade, the rest of the Tuesday session saw corn futures rally 5 ¾ to 8 ¼ cents and close near the session highs. That resulted in a lower low, higher high and a net gain for the March contract. March is also...
Wheat futures recovered most to more than all of the Monday drop on a turnaround Tuesday rally. Chicago futures were up by 10 ¾ to 12 cents on the close. Kansas City futures closed 8 to 12 ½ cents higher. MGE wheat futures ended the session up by 6 ¼...
A mixture of oil and water is called an emulsion, a mixture of two liquids that do not combine. Our science teachers would be proud of us for remembering this. Is the Middle-East conflict causing a similar mixture and getting the same results? They don't blend. Crude oil prices continue to rise, as well as its by-products.
Who doesn’t love a passive income? That's precisely what
dividend stocks offer – a consistent payout solely based on your ownership of shares. The beauty of it lies in its simplicity; there are no obligations attached. Investors can choose to cash in immediately, reinvest in more shares, or save it for a rainy day.
But hold on, there's more to it! The top-notch dividend stocks are versatile assets that offer more than just periodic payments to attract investors. Dividends contribute to the overall return on investment for a stock, and during bullish market conditions, this total return can soar to significant heights.
Wall Street’s analysts like dividend payers, too. According to Deutsche Bank's Omotayo Okusanya, there are two high-yield dividend stocks with strong potential for share price appreciation in the upcoming year. How high is their yield? At least a robust 9% or even better, projected for the near future. When you factor in their potential share price growth, you're on track for a lucrative investment. Let's take a closer look.
Omega Healthcare Investors
(
OHI)
We’ll dive into the world of REITs, real estate investment trusts, which are frequent players in the world of high-yield dividend stocks. REITs focus their business model on the acquisition and management of real properties, deriving their income from leases, management fees, and mortgage loans and related activities. Omega Healthcare Investors, founded in 1992, has taken a healthcare-oriented approach to the REIT model, and assembled a remunerative portfolio based on skilled nursing facilities (SNFs) and assisted living facilities (AFLs), as well as memory care and behavior care facilities.
The company holds ownership of its portfolio properties and leases them to outside operators who run and manage the facilities. These operators are carefully vetted and enter into long-term triple-net lease agreements with Omega, or into fixed-rate mortgage loans. The typical lease on an Omega property is set for 10 years, with extensions available to the operator. It’s a model designed to promote stability for Omega and a steady income stream.
At a quick glance, Omega's portfolio is extensive. The company has activities in 42 US states, as well as in the UK, and claims a total of 883 properties. The hands-on work is managed by the 65 operators who have partnered with Omega. Overall, the properties boast a total of 84,718 beds.
Omega will next report earnings on February 8, but for now, we can look back at the last financial release, for 3Q23, to get a feel for where things stand.
During 3Q23, Omega generated a total revenue of $242 million from its portfolio. This marked a modest increase of $2.6 million compared to the previous year and surpassed forecasts by an impressive $32 million. Additionally, in the third quarter, Omega successfully completed new portfolio investments worth $106 million.
A vital metric to consider when evaluating real estate investment trusts (REITs) is Funds From Operations (FFO). Omega's Q3 FFO amounted to 71 cents per share. While this figure represented a 6 cents per share decline compared to the prior year, it still managed to exceed expectations by one cent.
REITs are well-known for their dividends, and Omega offers a particularly strong payment. The dividend is fully covered by the company’s FFO and was most recently declared on January 26 for a February 15 payment. The dividend, at 67 cents per common share, has been held steady at its current rate since 2019. The annualized payment, of $2.68 per common share, gives a forward yield of 9.15%.
For Deutsche Bank’s Okusanya, the key point here is the long-term stability of the dividend. He writes of Omega, “While a handful of troubled tenants (Guardian, Maplewood, LaVie) could result in further lease restructuring and earnings downside, we don’t expect any potential lease restructuring to create dividend risk. In the meantime, earnings upside from an improved acquisition outlook, coupled with improving rent coverage due to improved senior housing and skilled nursing fundamentals will likely drive valuation multiples higher. We believe the [9.15]% dividend yield compensates investors for any near-term tenant credit headwinds.”
The 5-star analyst goes on to give OHI shares a Buy rating, with a $36 price target that suggests a 23% upside potential for the stock in the next 12 months. Taken with the dividend, the potential one-year return here is ~32%. (To watch Okusanya’s track record,
click here)
Although Deutsche Bank holds an optimistic view, the broader market sentiment for OHI is more cautious, with a consensus rating of Hold. This consensus is based on 11 ratings, comprising 2 Buys, 8 Holds, and 1 Sell. The current share price is $29.31, and the average price target of $32.33 suggests a ~10% potential upside over the one-year horizon. (See
OHI stock forecast
)
Sabra Health Care REIT (
SBRA)
The second stock on our list is Sabra Health Care, another REIT that is focused on the medical and health care segment. Sabra is based in California and has been in business since 2010. The company has built up a portfolio based on specialized medical properties, and like Omega above, Sabra acts as the owner/manager of the properties while outside partners operate the actual medical facilities.
More than half of Sabra’s portfolio – as much as 54.35% of the total – is made up of Skilled Nursing/Transitional Care facilities. No other segment makes up more than 16.1% of the total; that figure is claimed by the Senior Housing, Managed category; Senior Housing, Leased makes up 10.3% of the portfolio properties, and Behavioral Health facilities come to 14.4% of Sabra’s holdings.
Altogether, Sabra boasted 377 real estate properties in its investment portfolio as of September 30, 2023, the end of the last reported financial quarter. These properties had a total of 37,606 beds, and were spread across the continental US and into Western Canada.
This portfolio generated $161.6 million in revenues in the third quarter of 2023, a total that was up y/y from $140.7 million – but that also missed the forecast by $370,000. We’ll see Sabra’s next set of results in February. In the meantime, note that the company realized an FFO of 33 cents per share in Q3 – and that provided full coverage of the firm’s regular stock dividend payment.
That payment was last sent out on November 30 at 30 cents per share. The annualized rate of $1.20 per common share gives a forward yield of 9%. We should note here that Sabra has held the dividend payment steady since 2020, and that the company’s dividend payment history goes back to 2011.
Once again, top analyst Okusanya takes the optimistic stand on a high-yield dividend payer. He foresees the company boosting its earnings, and writes, “We are bullish on the earnings growth outlook for SBRA given the combination of (1) an improved acquisition outlook and (2) an improved SHOP portfolio earnings growth outlook. Improving skilled nursing fundamentals (driven by occupancy gains and a solid FY24 reimbursement backdrop) should also drive improving rent coverage – a historical catalyst for multiple expansion. Lastly, the valuation discount vs. SNF peers... suggests valuation is attractive at current levels.”
Okusanya goes on to give SBRA shares a Buy rating, supported by ‘Top Pick’ status and a $21 price target that indicates room for ~55% one-year upside potential. The price target and the dividend combine to suggest a strong one-year return of ~64%.
All in all, the stock gets a Moderate Buy consensus rating based on 8 analyst reviews that include 5 to Buy versus 3 to Hold. The stock’s $13.58 trading price and $16.13 average target price together imply that ~19% increase lies in store for SBRA this year. (See
Sabra stock forecast
)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’
Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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