We’ve seen around 25 dividend-paying stocks get downgraded by analysts so far in November. Ten of those downgrades have occurred in the last two weeks, as global economic concerns rise and the market trades lower.
We are highlighting 6 high-yield stocks to consider selling before the end of the year. Each of these stocks currently has a dividend yield over 3.5%. We’ll take a look at why each stock was downgraded and the new price targets where that information is available.
Campus Crest Communities (CCG)
Campus Crest was downgraded to sector perform from market perform by RBC Capital Markets. Home RBC cited concerns over execution that would lead to earnings risk, and lowered its price target from $13 to $11.
Campus Crest is a physical property REIT that builds, owns and manages student housing in the U.S. CCG has a dividend yield of 6.4% and doesn’t have much dividend history, as it just started paying dividends in 2011. It has a market cap of 283 million and 94% institutional ownership.
Home Properties (HME)
Home Properties was downgraded by RBC Capital Markets on November 28 from Outperform to Sector Perform. They set a new price target for HME of $60. The stock was recently trading at $53.50.
Home Properties is a physical property REIT that owns and rehabilitates apartment communities in the Northeast and Mid-Atlantic regions. HME has a dividend yield of 4.7% but has a negative 3-year and 5-year dividend growth rates.
E-House China (EJ)
Maxim Group downgraded E-House China Holdings from a hold to a sell on November 23. Maxim believes that macro uncertainties and slowing revenue growth make the stock a sell. It set the price target at $5.
E-House is a real estate services company in China that provides brokerage, consulting and advertising services. EJ has a dividend yield of 4.2% and pays dividends annually. EJ was recently trading at $5.50.
FBR Capital downgraded Frontline from market perform to underperform on November 23, saying that a restructuring and additional capital will be needed in 2012 unless there is a material recovery in the tanker market. FBR set a price target of $1.50 per share.
Frontline Ltd. Is a shipping company that operates a large fleet of crude carriers and Suezmax tankers. FRO has a dividend yield of 17%, but beware of another dividend cut that could be coming soon. The company reduced the dividend from $2 per share to $0.24 per share in 2011.
RPM Inc (RPM)
KeyBanc Capital Markets downgraded RPM International from a buy to a hold rating on November 22. This downgrade doesn’t come with much public information, and is very peculiar, since KeyBanc resumed coverage of RPM with a buy rating in September.
RPM International is a specialty chemical manufacturer that manufactures and sells paints and protective coverings. It has very solid dividend fundamentals. Its dividend yield is 3.9%, and the 5-year dividend growth rate is 5.2%. RPM has increased its dividend for 37 consecutive years.
Great Plains Energy (GXP)
Wunderlich downgraded Great Plains Energy from a buy to a hold on November 21. Wunderlich raised its price target to $22 per share, but cited valuation as the reason for the downgrade. GXP was recently trading at $20.
Great Plains Energy is a electric utility company that operates through its subsidiaries that server over 800,000 customers in Missouri and eastern Kansas. GXP has a dividend yield of 4.2% with a 5-year dividend growth rate of -9.8%. Its dividend has remained mostly unchanged in the last 3 years, after it was cut in half in 2008.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.