Mortgage News - Wells Fargo Recommends Investing In Two High-Yield Dividend Stocks, Including One Offering A 17% Yield

Wells Fargo Recommends Investing In Two High-Yield Dividend Stocks, Including One Offering A 17% Yield

Mortgage News June 2, 2023

Despite a 4:1 ratio of positive earnings per share (EPS) beats to misses in 1Q23, the S&P 500’s performance during the earnings season has been lackluster. Wells Fargo equity analyst Christopher Harvey suggests that the market gains this year have been primarily driven by funding and liquidity rather than strong fundamentals.

This raises concerns about the future outlook. Rising capital costs, reduced liquidity, and potential delays in the Federal Reserve’s actions contribute to the uncertainty. Harvey believes the market may be headed for a downturn, prompting the need for a defensive approach. Investing in high-yielding dividend stocks can provide a reliable income stream regardless of overall market fluctuations. Wells Fargo analysts have identified two potential opportunities, one offering an impressive 17% yield.

Blackstone Secured Lending, a business development company (BDC) affiliated with Blackstone, is the first stock under consideration. This BDC, operating as a financial services firm, extends credit and capital to a diverse range of American private companies across sectors such as software, healthcare, insurance, aerospace, and air freight. As of March 31, the company’s fair value portfolio investments amounted to $9.6 billion, with nearly 98% being first lien senior secured and over 99% having a floating rate.

Wells Fargo analyst Finian O’Shea emphasizes the company’s high-quality investments, which attract investors and provide flexibility in managing potential credit challenges. With unsecured liabilities and no restrictions on the underlying collateral, O’Shea rates BXSL shares as Overweight with a $26 price target.

Let’s shift our focus to Angel Oak Mortgage, a real estate investment trust (REIT) that specializes in financing residential properties. This financial company caters to “underserved” borrowers in the mortgage market, offering solutions and non-qualified mortgage (non-QM) loans.

Analyst Donald Fandetti recognizes the unique position of Angel Oak Mortgage, highlighting its focus on non-QM mortgage loans as an attractive long-term market opportunity. The company benefits from its affiliation with the broader Angel Oak platform, including deal flow from Angel Oak Mortgage Lending and expertise from Angel Oak Capital Advisors. Fandetti rates AOMR shares as Overweight with a price target of $9, indicating a potential 19.5% gain in the coming year.

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Wells Fargo Recommends Investing In Two High-Yield Dividend Stocks, Including One Offering A 17% Yield

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