We all love a comeback story. Steve Jobs. Tiger Woods. Mario Lemieux. These episodes tug at our heartstrings and make us believe anything is possible. The same applies to the stock market. You can make a fortune buying shares of a damaged company on the verge of a turnaround. And by getting in early, investors can often lock in robust yields.
Case in point: TerraForm Power Inc (NASDAQ:TERP). The partnership’s parent company, SunEdison Inc., filed for bankruptcy in 2016 following a downturn in the renewable energy market. Rising costs, weak revenues, and a high debt load hurt TerraForm’s results further. The business, however, has staged something of a comeback. New management, after Brookfield Asset Management Inc (NYSE:BAM) took a controlling stake in the firm, has energized the business. Last year, management outlined a three-part process to return to profitability, which focused on slashing costs, repairing the balance sheet, and boosting revenues from existing assets.
Source: Income Investors
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Last year, when Wall Street had given up on Procter & Gamble Co (NYSE:PG) following a series of poor financial results, I vowed to stand behind the consumer staples giant. I’m glad I did. PG stock has come roaring back. Since bottoming out at $72.60 last May, the stock has delivered a total return, including dividends, of 49%. Several investment firms have upgraded the stock, raising their target prices for the upcoming year. Yet despite the recent run, I remain bullish.
Procter & Gamble stock isn’t risk-free, of course. The input costs bite into the company’s margins. Private label brands, always a real threat, could steal market share. That said, management has taken the steps needed to combat these challenges, putting the business back on the right course. And given their commitment to rewarding shareholders with dividend hikes, I’m happy to stick with Procter & Gamble Co.
Source: Income investors
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If you're looking for a high-yield way to tap into the ongoing wave of LNG growth, you may want to climb aboard. this company yields 10.07% with strong distribution coverage of 1.22X. Since it's a C-Corp, it issues a 1099 at tax time - no K-1. There's also a preferred series yielding 8.61%. It has tailwinds from ongoing LNG growth.
Hoegh LNG Partners LP, (HMLP) is the only publicly traded pure play on FSRUs. FSRU stands for "Floating Storage & Regasification Unit," and it's a rapidly-growing presence in the LNG shipping industry. HMLP's parent/sponsor, Höegh LNG Holdings Ltd., is the largest provider of FSRUs in the market. FSRU leasing/chartering solves many problems for charterer companies and countries with no local supply of natural gas.
Source: Seeking Alpha
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This REIT continues to make a strong value proposition for investors that value income stability in a volatile market. It convinces in terms of diversification, portfolio quality, margin of dividend safety and valuation. The company does not grow its dividend payout, but the yield is nonetheless very attractive. Shares are undervalued. An investment in the stock yields 6.4 percent.
VEREIT, Inc. (VER) is my favorite commercial property REIT at the moment since the real estate investment trust convinces in terms of diversification, portfolio quality and distribution coverage. The REIT provides recurring dividend income with a high margin of dividend safety during times of market volatility, and shares are undervalued based on VEREIT's AFFO-guidance. The risk/reward-ratio is appealing, and an investment in VEREIT yields 6.8 percent.
Source: Seeking Alpha
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This company revealed problems with one of its largest tenants in April. The REIT reported declining revenues and AFFO/share in the first quarter. On the back of operator problems and deteriorating dividend coverage, the company slashed its dividend by 61 percent. Shares are lowly valued after the sell-off. An investment in the stock yields 7.7 percent.
Senior Housing Properties Trust (SNH) is not in an envious position: The healthcare real estate investment trust announced a major restructuring with respect to one of its largest operators in April which caused the stock to slump. Rental revenues and AFFO/share also dropped in the last quarter, causing the REIT to underearn its dividend. As a result, Senior Housing Properties Trust slashed its dividend by 61 percent, which exacerbated the sell-off. An investment in SNH at today's price point yields 7.7 percent.
Source: Seeking Alpha
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