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Alberto Abaterusso
Alberto Abaterusso
Articles (2207) 

Will These 3-High Forward Dividend Yield Stocks Outperform?

Vedanta Ltd tops the list

July 22, 2019 | About:

In terms of a higher dividend yield, the following stocks are thrashing the S&P 500 index, which granted 1.88% at market close on July 19.

Sell-side analysts on Wall Street also bestowed an overweight recommendation rating on the securities, indicating they may outperform either their industries or the entire market within 12 months.

The first company is Vedanta Ltd. (NYSE:VEDL), whose shares closed at $9.47 on Friday with a market capitalization of $8.69 billion. The stocks forward dividend yield of 10.92% was 904 basis points higher than the S&P 500 indexs dividend yield. The industry median for the forward dividend yield is 2.29%.

The India-based industrial metals and minerals company has paid dividends since November 2013.

On March 21, Vedanta paid a cash semi-annual dividend of 8.8 cents per share.

The stock also has a price-book ratio of 1.05 versus the industry median of 1.43 and an enterprise value-Ebitda ratio of 5.34 compared to the industry median of 8.36.

The stock declined 22% over the 12 months through July 19. Shares are trading below the 200-, 100- and 50-day simple moving average lines. The 52-week range is $8.34 to $13.44.

GuruFocus assigned the company a financial strength rating of 4.8 out of 10, and a profitability and growth rating of 6 out of 10.

Wall Street issued an average target price of $11.30 per share of Vedanta, implying 19.3% growth to hit within 52 weeks.

The 14-day relative strength index of 42 suggests the stock is neither oversold nor overbought.

The second company is Transportadora de Gas del Sur SA (NYSE:TGS). The stocks price closed at $15.2 per share on Friday with a market capitalization of $2.37 billion.

The Buenos Aires-based midstream oil and gas company has a forward dividend yield of 7.12%, which was 524 basis points higher that the S&P 500 indexs dividend yield. The industry medians forward dividend yield is 7.26%.

Transportadora paid dividends from September 1994 to August 2001; from May 2008 to December 2014; in January 2016; and from August 2018 to April 2019.

The last annual dividend it paid was $1.083 per common share on April 30.

The stock also has a price-book ratio of 2.67 versus the industry median of 1.68 and an enterprise value-Ebitda ratio of 6.25 versus the industry median of 12.

Climbing 5% over the past year through July 19, the share price is above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $8.81 to $17.78 per share.

GuruFocus assigned a rating of 6.3 out of 10 for the company's financial strength and a 9 out of 10 rating for its profitability and growth.

Wall Street issued an average target price of $20.71 per share of Transportadora de Gas del Sur SA, reflecting 36.3% growth within 52 weeks.

The 14-day relative strength index of 55 suggests the stock is neither oversold nor overbought.

The third company is Golar LNG Partners LP (NASDAQ:GMLP), which closed at $11.6 per share on Friday with a market capitalization of approximately $822.34 million. The forward dividend yield was 13.94% versus the industry median of 2.95%.

The Bermuda-based operator of floating storage regasification units and liquefied natural gas carriers has paid cash quarterly dividends from August 2011 to May 2019.

Currently, Golar LNG pays a cash quarterly dividend of 40.4 cents per common share.

The stock also has a price-book ratio of 1.31 versus the industry median of 1.03 and an enterprise value-Ebitda ratio of 9.26 versus the industry median of 10.67.

The stock declined 24% over the past year through July 19. The chart below shows the share price is below the 200- and 100-day simple moving average lines and slightly above the 50-day simple moving average line. The 52-week range is $10.23 to $16.99.

GuruFocus assigned a rating of 3.9 out of 10 for the company's financial strength and a rating of 5 out of 10 for its profitability and growth.

Wall Street issued an average target price of $13.58 per share of Golar LNG Partners LP, mirroring a 17% increase from the share price at close on Friday.

The 14-day relative strength index of 53 suggests the stock is neither overbought nor oversold.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about gold, silver and precious metals mining industries. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master's Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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