The second half of the year doesn’t have to be scary. Although the dangerous road may continue until the end of the summer, it must be considered that inflation will begin to decline due to the many disinflationary forces that may come into play.
In any case, many intriguing high-yielding stocks have become much cheaper over the past few weeks. Despite lower prices, negative momentum and a weaker macro outlook, many Wall Street analysts maintained their “Strong Buy” analyst rating consensus.
Given the idiosyncratic strengths of each company, I would say such ratings are well deserved as analysts are busy lowering the bar for most other companies in the second half.
In this article, we’ve used TipRanks’ comparison tool to take a closer look at three high-yielding stocks that Wall Street hasn’t yet moved on.
Suncor Energy (SU)
Suncor Energy is a Canadian energy company that has fallen on hard times in recent years. The company imploded as oil prices plunged off a cliff in 2020. Although the dividend fell victim to the oil price crash, Suncor appears poised to make up for lost time now that the tide has finally turned. in his favour.
Unlike more conventional oil producers in America, Suncor is a major player in Alberta’s oil sands. Western Canadian Select (WCS) oil tends to trade at a discount to West Texas Intermediate (WTI). Given high production costs and high emissions, energy companies that mine oil sands tend to trade at a discount to the peer group. Over time, the advent of solvent-assisted technologies may further improve the underlying economics of Canada’s oil sands operations and reduce the relative discount afforded to conventional oil producers.
Looking ahead, I expect Suncor to continue to make the most of the oil boom while it lasts. Even if Oil is on a downturn due to the recession, the resilient built-in business should help the company not suffer too painful a fall.
At the time of writing, Suncor shares are trading just south of 10.5 times trailing earnings. That’s incredibly cheap, considering how much operating cash flow the business is able to generate over the next year. The 4.07% yield is plentiful and in line with US growers.
Overall, SU stocks have a strong buy rating by analyst consensus, showing that Wall Street sees this company in a strong position. The rating is based on 9 purchases and 2 reservations made in the last 3 months. The shares are selling for $33.35 and the mid-price target, at $44.87, implies about 35% upside potential. (See SU stock forecast on TipRanks)
Metlife is a life insurance company that offers a wide range of other financial services. The company is geographically diversified, with exposure to the United States, Asia and Latin America. With outstanding managers running the show, Metlife has been able to keep its quarterly strength alive. Year-to-date, Metlife shares are up just under 2%, while the S&P 500 is flirting with a bear market.
Although we may be looking at a recession in 2023, Metlife looks more than capable of continuing to roll with the punches. Additionally, higher interest rates bode well for insurance company reinvestment returns. As the Fed raises interest rates while seeking to minimize the impact on the economy, Metlife may be able to avoid a serious drop.
Either way, Metlife appears to be an excellent long-term investment for investors seeking greater growth in the Asian market, which is experiencing a burgeoning middle class. Although global economic weakness may linger for more than a year, the price of entry looks modest at the writing.
Although it has outperformed the markets this year, Metlife stock is trading at 8.26 times earnings. With a dividend yield of 3.23% and a “Strong Buy” consensus analyst rating, MET stock looks like terrific value for people looking for income.
It’s not often that analysts all agree on a stock, so when it does, take note. MET’s Strong Buy Consensus Rating is based on 10 unanimous purchases. The stock’s average price target of $77.10 suggests a 22% upside from the current stock price of $94. (See MET stock forecast on TipRanks)
Broadcom is a semiconductor giant down 26% from its all-time high. Semis are quite cyclical, but the company has made great strides in diversifying into software through strategic acquisitions.
Broadcom has been making headlines lately for its $61 billion cash and stock takeover of VMWare. The deal makes Broadcom an infrastructure technology company that could make its stock less cyclical in the next economic downturn, with more of its overall revenue coming from software sales.
Looking to the second half, Broadcom looks well positioned to weather recent supply chain issues that are weighing it down. The company has been quite optimistic about its earnings going forward. As stocks continue to fall alongside the broader basket of semi-stocks, I would look for Broadcom to continue buying back its own shares.
Overall, I praised Broadcom for being more value-conscious than most other tech companies with the urge to merge or acquire. At just 23.7 times earnings, Broadcom looks like a bargain with a promising growth and dividend profile. At writing, the shares are yielding 3.40%.
Overall, we’re looking at a stock with unanimous consensus from Wall Street analysts – 13 critics weighed in, and they all put a stamp of approval here, for a strong Buy rating. AVGO shares are trading at $498.54 and the average price target of $700.58 suggests room for growth of 40.5% this year. (See AVGO stock predictions on TipRanks)
Dividend-rated Strong Buy stocks are becoming scarce as analysts look to lower the bar in the second half. Suncor, Metlife and Broadcom are well-run companies that Wall Street supports, even amid growing macro headwinds. Of the three names, they seem the most bullish on Broadcom. And I think they’re right on the money.
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Disclaimer: The information in this article represents the views and opinion of the author only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. uniquely. At the time of publication, the author had no position on any of the securities mentioned in this article.