Last month we wrote about the top four companies in our model portfolio in the article 4 Dividend Dominators for 2021 - Companies With More Than 70% Upside. These were the companies in our portfolio that we felt had the most upside potential for the coming year and we saw a relatively easy path for these companies to reach our price targets. Not surprisingly, all of these companies shared one common theme: Trading at steep valuation discounts due to the COVID Pandemic.
Two of the companies in our basket come from the Energy Sector: Exxon Mobil Corporation (XOM) and Royal Dutch Shell, Class B (RDS.B). We find this sector very attractive as most energy majors are trading at steep discounts due to the weak demand for oil and gas. This demand has been crushed as a result of mobility and quarantine restrictions designed to limit the spread of COVID-19. Similarly, Simon Property Group (SPG), the largest mall operator in the United States, also is trading at a depressed valuation due to the Pandemic. Lastly, AT&T Inc. (T) rounds out our list as the company has seen its stock price decimated as investors became increasingly concerned with its massive debt load and the potential for poor performance from its recent large acquisitions.
Source: Seeking Alpha
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