We’re in the midst of a market shift from a growth-oriented trading environment to one that supports value-oriented stocks. Investors should be cautious since the transition will inevitably result in high levels of volatility – just look at the recent NASDAQ downturn and the S&P 500’s 8% drop.
Below are two dividend stocks with high yields of 7% or more, as well as long-term performance that has outperformed the broader markets. Many analysts have given each stock a Strong Buy recommendation; let’s take a look at what makes them so appealing to Wall Street analysts.
Arbor Realty Trust
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Arbor Realty Trust, Inc. (NYSE:ABR), a commercial and multifamily mortgage lender, is the first stock we’ll look at. The company is a direct lender that funds Fannie Mae and Freddie Mac loans as well as provides financing to multifamily residential developers.
The company issued approximately $2.47 billion in dividends in the third quarter of last year, according to the most recent quarter disclosed.
The Arbor Realty stock has a 52-week range of $14.01 – $20.74. Also, the stock has a strong support of around $16.64. On several occasions last year, support was tested but held, and the stock rebounded. Currently, the stock is headed down to test the support levels once again, and it’s anticipated that the support will hold and the stock will skyrocket to new highs.
The stock is selling for $17.02 and has an average price target of $22.33 for a 31% one-year upside potential.
TPG RE Finance Trust
The second dividend stock we’ll look at is TPG RE Finance Trust, Inc. (NYSE:TRTX), a real estate investment trust (REIT), a type of company with a long history of paying out generous dividends. This reputation stems from a tax rule that mandates REITs to return a large part of revenues to shareholders directly — and dividends are a simple way to do so.
Over the past months, TRTX Stock has been trading in a channel between its resistance and support levels. In addition, its current quarter estimates have risen from 29 cents per share to 30 cents per share, while current year estimates have risen from $1.13 per share to $1.17 per share.
Overall, it’s clear that this is a stock that Wall Street likes; TRTX shares are priced at $12.25, and the $15.17 average price target from many analysts suggests room for a 24% upside in the next 12 months.
Summary
ABR and TRTX are dividend stocks that are trading at attractive valuations. The technical and fundamental analyses of these stocks indicate a “Strong Buy.â€
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