Whether deserved or not, dividend stocks have a reputation for being somewhat boring—sturdy and dependable, but in low-growth industries or comprising companies that are well beyond their days of rapid share price gains. Though dividend stocks are not necessarily safe in all cases, they have a reputation for being a strong defensive play.
On the other hand, Momentum stocks often don't pay dividends because they are in a high-growth stage of development when companies typically reinvest capital into the business itself to fuel further expansion. Thus, when a company has an impressive dividend yield and a recent history of upward price movement, it's a win-win for investors.
Three companies with strong year-to-date share price momentum also happen to have compelling dividend profiles and, in two cases, hearty recommendations from Wall Street analysts. These companies may offer the best of both the dividend and momentum stock worlds.
Greystone's Savvy Approach to Mortgage Revenue Bonds Has Protected Income
Greystone also has a new construction lending joint venture with BlackRock Impact Opportunities. This partnership led to the closing of two deals in the latest quarter which will likely continue to grow in 2025. With this venture, Greystone can fill a gap left by commercial banks that are unable to provide affordable construction lending opportunities.
Impressive Yield in the Energy Sector, But Beware the Payout Ratio
With a dividend yield of 11.9%, TXO Partners may be attractive to investors looking for steady passive income. However, investors should keep a close eye on the firm's dividend payout ratio—as of February 28, at -39%—which may be an indicator of difficulties maintaining the current payout plan going forward.
Shipping Volatility Doesn't Dampen Frontline's Growth and Dividend Prospects
Analysts have sent mixed signals on Frontline in recent months. In December, both Jefferies and Kepler Capital revised their assessments; Jefferies lowered its price target by $6 to $20 per share, and Kepler downgraded FRO shares to Hold from Buy.
However, the company still enjoys an overall Buy rating based on five analyst opinions, and its consensus price target of $24.46 suggests more than 52% upside potential. In addition to that, a healthy dividend yield and payout ratio of 8.5% and 55.5%, respectively, and FRO shares look enticing to both momentum and dividend investors.
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The article "Win-Win Momentum Plays With Strong Dividend Yields" first appeared on MarketBeat.
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