Every day it seems like rates go lower, and even if the Federal Reserve does raise rates this year, the fed funds rate would still be below 1%, which is a total historical anomaly. While utilities and other bond proxies have been bid to new highs as investors desperate for yield continue to buy them, other companies that provide solid yields have been forgotten about.
We screened the Merrill Lynch research database looking for companies that were rated Buy and had a yield of 7% or more. While perhaps too aggressive for conservative income accounts, they all make good sense for more risk tolerant growth and income portfolios.
This is the largest of the rural local exchange carriers and is expected to continue get a large dose of government money to provide continuing internet service in rural areas. CenturyLink Inc. (NYSE: CTL) is a global communications, hosting, cloud and IT services company enabling millions of customers to transform their businesses through innovative technology solutions.
CenturyLink offers network and data systems management, Big Data analytics and IT consulting, and it operates more than 55 data centers in North America, Europe and Asia. The company provides broadband, voice, video, data and managed services over a robust 250,000-route-mile U.S. fiber network and a 300,000-route-mile international transport network.
Top Wall Street analysts have liked like the stock over the past year as the company transforms itself from a telecom to a technology company. While some have worried over CenturyLink maintaining the dividend, most are positive on the comparisons for the second half of the year and sequential revenue stability. They also cite an update on the data center sale progress and the potential for stock buybacks as additional positives.
CenturyLink investors receive a 7.61 % dividend. The Merrill Lynch price target for the stock is $42, and the Wall Street consensus target is $29.23. The stock closed trading on Wednesday at $28.40 per share.
Green Plains Partners
This clean energy stock has gained a strong Wall Street following. Green Plains Partners L.P. (NASDAQ: GPP) is an unconventional renewable energy pick, but with a market capitalization just over half a billion dollars and a big dividend yield, this company could be a nice income or growth hold. The Nebraska-based company specializes in the storage, processing and transportation of ethanol fuel. Ethanol is already a major component of current fuel options. Most retail gasoline contains some ethanol, but there is a push to increase the use of pure ethanol fuel for commercial purposes.
Demand for renewable liquid fuels is expected to grow twofold by 2030, and fourfold by 2040. Green Plains is looking to capitalize on this push and adoption by providing the infrastructure that will underpin the industry as it expands.
The company posted strong second-quarter results that came in above the analysts’ estimates. Green Plains also posted an 11% quarter-over-quarter increase in storage and throughput volumes as Green Plains Inc. crush margins meaningfully improved.
Green Plains shareholders receive an 8.4% distribution. Merrill Lynch has a $21 price target for the stock, and the consensus target is $19.13. Shares closed most recently at $19.56.