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Piper Sandler recommends two high-yield stocks
Piper Sandler has highlighted AGNC Investment and Rithm Capital for investors seeking strong dividends.
Piper Sandler suggests two stocks offering solid dividend yields amid market concerns.
Two High-Yield Stocks Recommended by Piper Sandler
Piper Sandler has highlighted two dividend stocks that could attract investors looking for high yields. The S&P 500 has recovered significantly since hitting a low earlier this year, but experts caution that further gains may be limited. Piper Sandler's chief investment strategist, Michael Kantrowitz, pointed out that recent market movements have mostly addressed macroeconomic risks, indicating that future returns may not be as robust. Amid this backdrop, analysts Crispin Love recommends AGNC Investment, a real estate investment trust known for its strong dividend policy, featuring a yield of 15.5%. The company's focus on government-backed mortgage securities attracts investors seeking reliable income. Meanwhile, Rithm Capital stands out with a diverse portfolio and a solid dividend yield of 8.4%, bolstered by a favorable response to its recent acquisition of Sculptor Capital Management. Both stocks are seen as attractive options for income-driven investors looking to weather economic uncertainty.
Key Takeaways
"I think it’s important to recognize that the last three months’ moves were largely pricing out of macro risk."
Kantrowitz emphasizes the need for realism in market expectations.
"We believe AGNC can maintain its current dividend level, generating mid-to-high teens returns over the near-term."
Love is optimistic about AGNC's dividend sustainability in a challenging environment.
"Rithm is a diversified business across mortgage and asset management currently trading at just 5x earnings."
Love highlights Rithm's attractive valuation in his analysis.
The endorsement of AGNC and Rithm Capital by Piper Sandler resonates well with income-focused investors, especially in an uncertain economic climate. Monthly dividends from AGNC provide consistent cash flow, making it appealing for those managing their expenses. Rithm Capital's expansion into asset management reflects a strategic move to diversify and strengthen its market position. However, investor caution is warranted as the overall market outlook remains unstable. This suggests a mix of opportunity and risk, especially in the financial sector where volatility can affect dividend sustainability.
Highlights
- Dividend yields are the silver lining in uncertain markets.
- AGNC provides cash flow when it's needed most.
- Rithm's expansion may be just what investors are looking for.
- In a shifting market, high-yield stocks are a solid choice.
Concerns about market volatility affecting dividends
As the market faces uncertainty, there is a risk that dividend payouts may be impacted. Investors should weigh potential market fluctuations when considering these stocks.
Investors should carefully consider these options amidst economic uncertainty.
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