It has been a dismal market since the election results came in on Tuesday as the market has sold off consistently over the last week. Trying to find a silver lining in the sell-off, investors who wisely did not chase yield and have reserves in cash can now start to nibble at some high yield plays at lower entry points. Dividend paying stocks have particularly been hit hard as the prospect of much higher dividend taxes in 2013 erodes market sentiment on these equities. Here are two high yield selections I am looking to pull the trigger on as the market continues to pull back.
Excel Trust (EXL) develops and manages community and power centers, grocery anchored neighborhood centers and freestanding retail properties.
4 reasons EXL is solid income pick up at $11.50 a share:
- EXL yields 5.5% and has doubled its dividend payouts over the last two years.
- Insiders have been frequent and consistent buyers of the shares over the last 18 months.
- One of the best measures of a REIT is operating cash flow (OCF) and EXL has more than quintupled OCF over the past three years.
- Earnings are rising nicely. EXL earned 61 cents a share in FY2011 and is on track for 75 cents a share in FY2012. Analysts have 85 cents a share in earnings targeted in FY2013. Commercial real estate is also a good play on the stagflation I see coming with the re-election of President Obama.
Hercules Technology Growth Capital (HTGC) is a private equity, venture capital, and venture debt firm specializing in providing debt and equity to privately held venture capital and private equity backed companies
4 reasons HTGC is a good selection for an income portfolio at just over $10 a share:
- It yields a robust 9.5% and has increased distribution payouts by 20% over the last 2 ½ years.
- Like Excel Trust, insiders have been net buyers of the shares over the last year.
- Revenue growth should be north of 20% for both FY2012 and FY2013 and the shares sell for under 9.5x forward earnings.
- The mean analyst price target held by the 10 analysts that cover the stock is over $12 a share and stock sells at just 7% over book value.
Disclosure: I am long EXL.