3 Buy-Rated Companies That Recently Increased Their Dividends
The stock market has been facing severe unrest due to various macroeconomic and geopolitical issues. With the fears of a looming recession, investors can consider investing in stocks that offer...
The stock market has been facing severe unrest due to various macroeconomic and geopolitical issues. With the fears of a looming recession, investors can consider investing in stocks that offer a steady income stream by paying dividends. Ladder Capital (LADR), W. R. Berkley (WRB), and FedEx (FDX) have recently increased their dividends and are rated a Buy in our proprietary rating system. So, these stocks could be solid additions to your portfolio. Continue reading.
The major market indexes have witnessed severe selling pressure of late due to the multi-decade high inflation and the Federal Reserve's resolution to fight it by aggressively tightening the monetary policy.
The consumer price index rose 8.6% in May, marking its highest increase since December 1981, while the nonfarm payrolls came in higher than analyst estimates, increasing by 390,000 in May. The Federal Reserve has adopted a hawkish stance to tame the surging inflation. It has hiked the interest rates thrice this year, with the latest being a 75-basis point increase last week.
Analysts believe raising interest rates quickly and aggressively might lead to a recession. In such uncertain market conditions, investors may consider adding dividend-paying stocks to protect their portfolios from market volatility by ensuring a steady income stream.
Given this backdrop, we think it could be wise to add fundamentally strong stocks Ladder Capital Corp (LADR), W. R. Berkley Corporation (WRB), and FedEx Corporation (FDX) to your portfolio. These companies have recently increased their dividends and are rated a Buy in our proprietary POWR Ratings system.
Ladder Capital Corp (LADR)
LADR is a commercial real estate finance company. The company's segments include loans, securities, and real estate. It invests primarily in senior first mortgage fixed and floating rate loans collateralized by commercial real estate with flexible loan structures.
LADR's net interest income increased 236.8% year-over-year to $9.17 million in the first quarter ended March 31, 2022. The company's total other income increased 96.3% year-over-year to $65.24 million. Also, its total assets increased 10.5% year-over-year to $5.97 billion.
LADR's board of directors declared a quarterly dividend of $0.22, an increase of 10% over its prior dividend. The dividend is payable on July 15, 2022. It has a four-year average dividend yield of 9.54%. Its current dividend translates to an 8.81% yield.
Analysts expect LADR's EPS and revenue for the quarter ending June 30, 2022, to increase 140% and 72.7% year-over-year to $0.24 and $64.91 million, respectively. It has surpassed Street EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has lost 8.7% to close the last trading session at $9.99.
LADR's strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Sentiment and a B grade for Growth. It is ranked #6 out of 50 stocks in the REITs – Diversified industry. Click here to see the other ratings of LADR for Value, Momentum, Stability, and Quality.
W. R. Berkley Corporation (WRB)
WRB is an insurance holding company that operates as a commercial lines writer in the United States and internationally. It operates in two segments, Insurance, and Reinsurance & Monoline Excess.
The Insurance segment is engaged in a predominantly commercial insurance business, including excess and surplus lines, admitted lines, and specialty personal lines. The Reinsurance & Monoline Excess segment is involved in the reinsurance business on a facultative and treaty basis.
On February 23, 2022, WRB announced that it had agreed to sell an office building located at 52 Lime Street, London, U.K. The sale is expected to bolster the total returns to shareholders.
For the fiscal first quarter ended March 31, 2022, WRB's return on equity came in at 35.5%, compared to 14.5% in the year-ago period. The company's net premiums written increased 17.7% year-over-year to $2.41 billion. Also, its total revenues increased 35.1% year-over-year to $2.91 billion.
WRB's board of directors declared a quarterly dividend of $0.10, an increase of 15.3% over its present rate. In addition, a special dividend of $0.50 per share will be payable on July 7, 2022.
Over the last three years, WRB's dividend payout has grown at a 9.14% CAGR. Its four-year average dividend yield is 1.39%, and its current dividend translates to a 0.60% yield.
For fiscal 2022, WRB's EPS is expected to increase 18.2% year-over-year to $4.02. Its revenue is expected to increase 21.6% year-over-year to $2.63 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past month, the stock has lost 3.2% to close the last trading session at $66.82.
It's no surprise that WRB has an overall B rating, which translates to a Buy in our POWR rating system.
It has an A grade for Sentiment and a B for Growth, Momentum, and Stability. Within the Insurance – Property & Casualty industry, it is ranked #2 out of 55 stocks. Click here to see the other ratings of WRB for Value and Quality.
FedEx Corporation (FDX)
FDX provides transportation, e-commerce, and business services through companies competing collectively and operating independently under the FedEx brand. The company's segments include FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services.
On January 24, 2022, FDX and Microsoft Corp. (MSFT) announced the next solution as part of their multi-year collaboration to transform commerce, supply chains, and logistics.
FDX's President and CEO Raj Subramaniam said, "This next phase of our collaboration will continue to connect the unmatched supply chain insights from the FedEx network with the Microsoft Cloud to improve e-commerce experiences for brands, merchants, and consumers."
FDX's board of directors declared a quarterly dividend of $1.15, an increase of 53% over its prior dividend. The dividend is payable on July 11, 2022. Over the last three years, FDX's dividend payout has grown at a 4.89% CAGR. Its four-year average dividend yield is 1.33%, and its current dividend translates to a 2% yield.
FDX's revenue increased 9.9% year-over-year to $23.64 billion for the third quarter ended February 28, 2022. The company's adjusted net income increased 29.6% year-over-year to $1.21 billion. Also, its adjusted EPS came in at $4.59, representing an increase of 32.2% year-over-year.
Analysts expect FDX's EPS for the quarter ending May 31, 2022, to increase 37.3% year-over-year to $6.88. Its revenue for fiscal 2022 is expected to increase 11.4% year-over-year to $93.49 billion. Over the past month, the stock has gained 4.6% to close the last trading session at $229.90.
FDX's POWR Ratings reflect solid prospects. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
It has a B grade for Growth and Quality. It is ranked #4 out of 17 stocks in the A-rated Air Freight & Shipping Services industry. Click here to see the other ratings of FDX for Value, Momentum, Stability, and Sentiment.
LADR shares were unchanged in premarket trading Monday. Year-to-date, LADR has declined -15.31%, versus a -22.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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