The Wall Street firms that we cover here at 24/7 Wall St. all keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the stocks they not only like on a longer-term basis but those that usually have big upside to the assigned target price. With the first quarter winding down, many firms on Wall Street have tweaked their lists to account for potential changes for the second quarter and the balance of 2022.
Analysts at Raymond James who contribute to the firm’s well-respected Analysts Current Favorites list have to provide one of the stocks in their coverage space for inclusion in the list. Hence, it is considered the favorite choice.
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We screened the list looking for stocks that are not overextended or overbought and companies that pay solid and dependable dividends to shareholders. We were also interested in companies likely to benefit from the current macro environment of rising interest rates and strong commodity pricing.
The following eight stocks look like very good ideas for growth and income investors looking to reset portfolios for the rest of the year. While they have Raymond James highest Strong Buy rating, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
APA
This company was long considered an industry leader when it was known as Apache, and the stock is perhaps offering one of the best entry points in the sector, despite Warren Buffet’s massive recent purchases. APA Corp. (NYSE: APA) explores for and produces oil and gas properties. It has operations in the United States, Egypt and the United Kingdom, as well as has exploration activities offshore Suriname. It also operates gathering, processing and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines.
The company is one of the largest U.S. exploration and production companies, with 2.3 billion barrels of oil equivalent of proven reserves (63% liquids). It is an explorer, acquirer and exploiter a fiscally conservative company that has grown its reserves and production consistently via acquisitions and organic projects.
Shareholders receive a 1.36% dividend. The Raymond James price target for APA stock is $59, and the consensus is much lower at $43.21. The last trade for Thursday came in at $40.78 a share.
24/7 Wall St.Cigna
This is a solid value buy in the health care sector. Cigna Corp. (NYSE: CI) is a major health services organization that provides insurance and related products and services in the United States and internationally. All products and services are provided exclusively by or through operating subsidiaries of Cigna, including Cigna Health and Life Insurance Company, Life Insurance Company of North America, Cigna Life Insurance Company of Canada and their affiliates.
The health care giant offers an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits and other related products, including group life, accident and disability insurance. Cigna maintains sales capability in 30 countries and jurisdictions, and it has approximately 86 million customer relationships throughout the world.
Cigna stock investors receive a dividend of 1.92%. Raymond James has a $275 price target, and the consensus target is $261.48. The shares closed on Thursday at $242.10.
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Kite Realty
The shares of this company have had a nice move and look poised to trade higher. Kite Realty Group Trust (NYSE: KRG) is a full-service, vertically integrated real estate investment trust (REIT) that provides communities with convenient and beneficial shopping experiences.
The company connects consumers to retailers in desirable markets through its portfolio of neighborhood, community and lifestyle centers. Using operational, development and redevelopment expertise, the company continuously optimizes its portfolio to maximize value and return to its shareholders.
Shareholders receive a 3.41% distribution. The $27 Raymond James price target is just higher than the $26.36 consensus target. Kite Realty stock closed on Thursday at $22.02.
24/7 Wall St.Public Storage
This giant self-storage leader has always been a go-to REIT stock for income investors. Public Storage Inc. (NYSE: PSA) is a fully integrated, self-administered and self-managed REIT that primarily acquires, develops, owns and operates self-storage facilities.
As of September 30, 2020, the company had interests in 2,504 self-storage facilities located in 38 states with approximately 171 million net rentable square feet in the United States. It had an approximate 35% common equity interest in Shurgard Self Storage, which owned 239 self-storage facilities located in seven Western European nations with approximately 13 million net rentable square feet operated under the Shurgard brand.
Furthermore, Public Storage had an approximate 42% common equity interest in PS Business Parks, which owned and operated approximately 28 million rentable square feet of commercial space.
Investors receive a 2.25% distribution. Raymond James has set a $375 price objective. The consensus target on Public Storage stock is up at $399.79, and Thursday’s final print was $373.12.
Redwood Trust
This is a very solid play for income investors looking for a reasonably safe vehicle. Redwood Trust Inc. (NYSE: RWT) operates as a specialty finance company in the United States. The company operates through three segments.
The Residential Lending segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization or transfer to its investment portfolio. This segment also offers derivative financial instruments to manage risks associated with residential loans.
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The Business Purpose Lending segment operates a platform that originates and acquires business purpose loans, such as single-family rental and bridge loans for subsequent securitization or transfer into its investment portfolio.
The Third-Party Investments segment invests in residential mortgage-backed securities issued by third parties, as well as in K-Series multifamily loan securitizations and SLST reperforming loan securitizations. This segment also offers servicer advance and other residential and multifamily credit investments.
The company qualifies as a REIT for federal income tax purposes, and it intends to distribute at least 90% of its taxable income as dividends to shareholders.
Shareholders pocket an 8.80% distribution. The price target on Redwood Trust stock at Raymond James is $16.50. The $14.66 consensus target is a bit closer to Thursday’s final share price of $10.53.
Targa Resources
This top energy midstream company is structured as a C-corporation and is on many Wall Street top stock picks lists. Targa Resources Corp (NYSE: TRGP) is a leading provider of midstream services and one of the largest independent midstream energy companies in North America. Targa owns, operates, acquires and develops a diversified portfolio of complementary midstream energy assets.
The company is primarily engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling natural gas liquids and related products, including services to liquefied petroleum gas exporters; gathering, storing and terminaling crude oil; storing, terminaling and selling refined petroleum products.
Targa Resources has one of the premier asset positions in the Permian Basin. With solid management, a strong balance sheet and attractive exposure to some of the most attractive U.S. energy basins, it remains a top pick across Wall Street.
The dividend yield for Targa Resources stock is 1.94%. The Raymond James price objective of $80 compares with the $76.30 consensus figure and the most recent close at $72.88.
Valero Energy
This Wall Street favorite is a solid energy play for conservative investors looking for safer ideas. Valero Energy Corp. (NYSE: VLO) is one of the largest independent petroleum refining and marketing companies in the United States. It is based in San Antonio, Texas; owns 13 refineries in the United States, Canada and Europe; and has a total throughput capacity of around 2.5 million barrels per day.
Valero also is a joint venture partner in Diamond Green Diesel, which operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America’s largest biomass-based diesel plant.
Valero sells its products in the wholesale rack or bulk markets in the United States, Canada, the United Kingdom, Ireland and Latin America. Approximately 7,400 outlets carry Valero’s brand names.
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Investors receive a 4.10% dividend. Analysts at Raymond James have a price target of $105. The consensus target is $98.01. Valero Energy stock closed at $96.44 on Thursday.
Webster Financial
This is an off-the-radar idea in financial services that could be a big winner in a rising interest rate environment. Webster Financial Corp. (NYSE: WBS) operates as the bank holding company for Webster Bank National Association, which provides a range of banking, investment and financial services to individuals, families and businesses in the United States.
The Commercial Banking segment provides lending, deposit and cash management services; commercial and industrial lending and leasing, commercial real estate lending, equipment financing and asset-based lending, as well as treasury and payment services; wealth management solutions to business owners, operators and consumers; and trust, asset management, financial planning, insurance, retirement and investment products.
The Retail Banking segment provides deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers. The company also offers online and mobile banking services. As of December 31, 2021, it operated 130 banking centers and 251 ATMs.
Its HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, consultants and financial advisors.
Investors receive a 2.80% dividend. The Raymond James target price is $73. Webster Financial stock has a $72.10 consensus target, and shares closed on Wednesday at $57.81 a share.
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