All of the companies that we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high conviction stock picks. These are generally the companies they not only like on a longer term basis, but ones that usually have big upside to the assigned target price. With the second-quarter earnings season in full effect, many firms on Wall Street have tweaked their lists to account for potential changes for the rest of the third quarter and the balance of 2022.
The analysts at Raymond James who contribute to the firm’s well-respected Analysts Current Favorites list of stocks to Buy, have to give the list one of the stocks in their coverage space for inclusion in the list, and hence it is considered the favorite choice.
We screened the list looking for companies that are not over-extended or overbought, and also pay solid and dependable dividends to shareholders. We found seven that look like very good ideas for growth and income investors looking to reset portfolios for the rest of the year. While all of these stocks have Raymond James highest “Strong Buy” rating, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Insurance companies tend to do well regardless of the economy, and this sector giant may be an outstanding pickup for investors. The Allstate Corporation (NYSE: ALL), together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. The company operates through Allstate Protection; Protection Services; Allstate Health and Benefits; and Run-off Property-Liability segments.
The Allstate Protection segment offers private passenger auto and homeowners insurance; specialty auto products, including motorcycle, trailer, motor home, and off-road vehicle insurance; other personal lines products, such as renter, condominium, landlord, boat, umbrella, and manufactured home and stand-alone scheduled personal property; and commercial lines products under the Allstate and Encompass brand names.
The Protection Services area provides consumer product protection plans and related technical support for mobile phones, consumer electronics, furniture, and appliances; finance and insurance products, including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel, and paint and fabric protection; roadside assistance; device and mobile data collection services; data and analytic solutions using automotive telematics information; and identity protection services. This segment offers its products under various brands including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside Services, Arity, and Allstate Identity Protection.
The Allstate Health and Benefits provides life, accident, critical illness, short-term disability, and other health insurance products. The Run-off Property-Liability segment offers property and casualty insurance. It sells its products through call centers, agencies, financial specialists, independent agents, brokers, wholesale partners, and affinity groups, as well as through online and mobile applications.
Shareholders are paid a 2.94% dividend. The Raymond James price target for the insurance giant is posted at $155, while the Wall Street consensus target is set lower at $142.14. Thursday’s final trade was reported at $115.74.
This self-storage real estate investment trust may seem an odd beneficiary of rising rates, but it should continue to benefit. CubeSmart, Inc. (NASDAQ: CUBE) is a self-administered and self-managed real estate investment trust. The company’s self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers. According to the Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.
In a rising rate environment, hard assets like real estate gain in value, and the self-storage REITs are also in a good position as capital expenditures and the need for additional capital are often very low.
Shareholders are paid a rich 3.77% dividend. Raymond James has a Strong Buy rating and their price target is posted at $52. The Wall Street consensus is set at $51.22. The stock was last seen on Thursday at $45.65 up close to 4%.
This energy master limited partnership sold off during the recent decline in oil and is offering an attractive entry point. DCP Midstream LP (NYSE: DCP) together with its subsidiaries, owns, operates, acquires, and develops a portfolio of midstream energy assets in the United States.
The company operates through logistics and marketing, and gathering and processing. The logistics and marketing segment engages in transporting, trading, marketing, and storing natural gas and natural gas liquids (NGLs); and fractionating NGLs.
The gathering and processing section is involved in gathering, compressing, treating, and processing natural gas; producing and fractionating NGLs; and recovering condensate. DCP Midstream owns and operates about 35 natural gas processing plants. It serves petrochemical and refining companies, and retail propane distributors.
Investors are paid a very solid 5.53% dividend. The Raymond James target price for the shares is posted at $45, which compares with the $43.29 consensus and Thursday’s closing print of $34.30.
This is a regional bank based in the South that offers solid growth and a nice dividend as well. Hancock Whitney Corporation (NYSE: HWC) operates as the bank holding company for Hancock Whitney Bank that provides a range of banking products and services to commercial, small business, and retail customers.
The company accepts various deposit products, such as non-interest-bearing demand deposits, interest-bearing transaction accounts, savings accounts, money market deposit accounts, and time deposit accounts. Its loan products include commercial and industrial; commercial real estate; construction and land development; residential mortgages, including fixed and adjustable rate loans; consumer loans comprising second lien mortgage home loans, home equity lines of credit, and nonresidential consumer purpose loans; revolving credit facilities; and letters of credit and financial guarantees.
The company also offers investment brokerage and treasury management services, and annuity and life insurance products; and trust and investment management services to retirement plans, corporations, and individuals, as well as holds on foreclosed assets. It operates 208 full-service banking and financial services offices, and 275 automated teller machines in the Gulf south corridor, including south Mississippi; southern and central Alabama; southern, central, and northwest Louisiana; the northern, central, and Panhandle regions of Florida; and east Texas, including Houston, Beaumont, and Dallas, as well as operating a loan production office in Nashville, Tennessee.
Shareholders are paid a solid 2.25% dividend. The Raymond James price target is posted at $60, which compares with the lower $58.22 consensus and Thursday’s closing trade of $47.85.
The shares of this company have backed up recently and are offering the best entry point in almost a year. Kite Realty Group Trust (NYSE: KRG) is a full-service, vertically integrated real estate investment trust (REIT) that provides communities with convenient shopping experiences.
The company connects consumers to retailers in desirable markets through its portfolio of neighborhood, community, and lifestyle centers. Using operational, development, and redevelopment expertise, Kite tries to optimize its portfolio to maximize value and return to the company’s shareholders.
Shareholders are paid an appealing 4.48% distribution. The Raymond James team has a $27 price target while the consensus is set lower at $24.30. The shares were last seen Thursday at $19.79 up close to 4%.
Starwood Property Trust
This is a high yielding company run by real estate legend Barry Sternlicht that offers big-time total return potential. Starwood Property Trust, Inc. (NYSE: STWD) is a real estate investment trust (REIT) with a presence in the United States, Europe, and Australia. It operates through four segments: commercial and residential Lending, infrastructure lending, property, and investing and servicing segments.
The commercial and residential lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, including distressed or non-performing loans.
The infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment.
The investing and servicing unit manages and works out problem assets; acquires and manages unrated, investment-grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts.
Investors are paid a massive 8.25% distribution. Raymond James has set a $30 price target versus the consensus across Wall Street of $28.08. The last trade Thursday hit the tape at $23.72.
This is a Wall Street favorite that is a solid energy play for conservative balanced accounts looking for safer ideas. Valero Energy Corporation (NYSE: VLO) is one of the largest independent petroleum refining and marketing companies in the United States. The company is based out of San Antonio, Texas, owns 13 refineries in the United States, Canada, and Europe, and has a total throughput capacity of around 2.5 million barrels per day.
Valero also is a joint-venture partner in Diamond Green Diesel, which operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America’s largest biomass-based diesel plant. Valero sells its products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland and Latin America. About 7,400 outlets carry Valero’s brand names.
Investors are paid an outstanding 3.52% dividend. The Raymond James analysts have the price target posted at a strong $150, and the Wall Street competition has again set the consensus target lower at $138.20. Valero Energy shares were last seen on Thursday at $109.51.
While none of these stocks will be making any massive parabolic moves higher soon, they are safer ideas for nervous investors concerned about the potential for inflation to wreak havoc on the economy the rest of 2022. Plus we focused on energy, real estate, banking and insurance, all are sectors that should thrive in the current inflationary environment. Readers should note that REIT distributions can contain return of principal.