Seconds after carving the turkey (or tofurkey, your pick) scores of money-savvy American consumers will cut to the chase known as Black Friday, then Cyber Monday, or for all we know Kitchen Appliance Wednesday, in the name of saving significant wads of cash.
But with these pursuits come long lines and a huge cash outlays, too: The more you spend, the less likely you’ll come out anything close to ahead. So before elbowing your way down the aisles, consider some gifts that will, as they say, keep on giving. To your portfolio, that is. And if you like, mark the occasion with one of those catchy names, like Stock-ing Stuffer Saturday.
Meanwhile, who needs regaling for the umpteenth time about pilgrims landing at Plymouth Rock when you can make investing history via BlackRock TCP Capital (ticker: TCPC).
“TCPC has been a top-performing business development company over the last five or six years,” says Chris Testa, managing director and head of research at National Securities Corp. in New York City.
Testa gives BlackRock a “buy” rating, and at its current price just shy of $14 per share — down 15 percent over the last 12 months — you could say it’s quite the bargain. Or if you prefer: That’s 15 percent off, holiday shoppers, for (perhaps) a limited time.
BlackRock TCP is one of three dividend-yielding stocks experts recommend for the month of November. Here’s a closer look at that business development company and two others.
BlackRock TCP: Worth standing on. At first blush, BlackRock might not seem an ideal investment given its disappointing performance in 2018. Its steady downward slide began in April 2017, and over the last five years TCPC is off 18 percent. But generally speaking, low is where pundits of the Warren Buffett ilk love to get in — and so the big question is whether BlackRock is an undervalued stock that, true to its name, is ready to rock?
The answer isn’t straightforward just yet. Testa notes that a prospective merger between TCPC and BlackRock Capital Investment Corp. ( BKCC) has market mavens nervous, since the latter has been “poorly run,” as he puts it.
“An important consideration would be that a shareholder vote would likely be required, and I doubt that TCPC shareholders would vote in favor of this merger,” Testa says.
And if that comes to pass, cool heads should revisit the stock’s solid foundation.
“The company’s underlying fundamentals remain very sound,” he says. “Even before the recent selloff in equities and BDCs in particular, TCPC was not participating in the upper middle market rally of many of its peers despite continued strong performance.”
With a quarterly dividend of 36 cents per share, TCPC has barely budged since its 2012 mark of 34 cents per share. Meanwhile, major analyst firms agree heartily with Testa’s assessment. All but one of the six weighing in call BlackRock TCP a “strong buy,” with the other labeling it a “buy.”
Verizon Communications (VZ): Don’t miss these misfits. You could call telecom giant Verizon the equivalent of the kid scooping up once-coveted baseball cards no one else wants. Among VZ’s holdings through its Oath subsidiary are two of the most colossal failures in web content history. AOl’s bungled merger with the onetime Time-Warner ranks among the worst in history, while Yahoo was a formerly dominant search engine trounced into the digital dust by Google ( GOOG, GOOGL).
Yet as anyone who’s watched “Moneyball” knows, sometimes the castoff players get the last laugh and a long winning streak.
“Verizon has a really nice dividend yield of 4.21 percent and has an upside target of $75 per share,” says Michael C. Owens, president of Carolina Financial Services Group, based in Greenville, North Carolina.
That share price goal marks ambitious territory; Verizon currently sells at roughly $55.50. But there’s little reason to question Owens’ enthusiasm, as the stock is up close to 14 percent over the last 12 months, and 32 percent since hitting a deep trough in July 2017.
Breaking the dividend down further, it just inched up to 60.3 cents per share quarterly from 59 cents in June 2018, and has risen steadily over the last five years. In 2017, VZ paid out $9.5 billion in cash dividends. And as for the next business call it hopes to make, “It’s investing in 5G, which should attract new customers,” Owens says. “This should pay off for the company in the next few years.”
Visa (V): Earning extra credit. As the banking industry shifts into overdrive with faster payments, revised credit scoring metrics and artificial intelligence, Visa stands poised to take advantage of all that and more.
Granted, an early October slump shaved 11 percent off its share price in less than two weeks. But keep in mind that investors may have punished the stock unfairly; Visa missed its volume growth target but still beat earnings forecasts. Meanwhile, Visa has been nothing but up, up, up over the last 12 months, rising more than 25 percent to its current share price of about $138. And as one of the four major credit card companies, Visa isn’t about to go anywhere.
“Its five-year annualized dividend growth rate of 20 percent is solid,” says Kian Salehizadeh, senior analyst at Blockforce Capital in San Diego.
Expect dividends to grow by double digits in the next 12 months, he adds. Right now, the quarterly dividend of 25 cents per share is up 4 cents from the previous quarter and more than double what it was in 2012.
Meanwhile, “the company continues to innovate in the payment processing space, incorporating new technologies for person-to-person money transfers, among other areas,” Salehizadeh says.
And if it helps inform your shopping list, think of it just like this: For all the debt you’ll run up on your credit cards over the holidays, it sure would be nice to get a chunk of change back from them the Wall Street way.
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