The Fed's intention to raise interest rates aggressively later this year to tame the surging inflation has created bearish sentiment among investors. According to Deutsche Bank, the economy could fall into a major recession before the end of 2023 if the Fed hikes interest rates to 5-6%. Further, no easing of tensions related to the Ukraine-Russia war and rising energy prices are expected to keep the market volatile in the near term.
Moreover, this year's uncertain economic recovery could put further pressure on the stock market. Therefore, investors could consider investing in dividend-paying stock to ensure a steady income stream and dodge near-term market fluctuations.
That’s why today we're highlighting 3 exciting stocks from our Top 10 Income screen, which is just 1 of the 10 screens in our POWR Screens 10 service (more on that below). We think fundamentally sound dividend stocks Westlake Chemical Partners LP (WLKP), Marubeni Corporation (MARUY), and Natural Resource Partners L.P. (NRP) could be great additions to your portfolio based on their history of consistent dividend payments.
Westlake Chemical Partners LP (WLKP)
WKLP acquires, develops, and operates ethylene production facilities and related assets in the United States. The company's ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen, directly to third parties on either a spot or contract basis.
WLKP paid a quarterly dividend of $0.47 on February 17, 2022. Its $1.89 annual dividend yields 6.9% on the current share price. It has a four-year average dividend yield of 7.8%. In addition, the company's dividend payouts have increased at a 7.3% CAGR over the past five years.
During the fourth quarter ending December 31, 2021, WLKP's total net sales increased 34.5% year-over-year to $330.46 million. The income from operations grew 81.4% from its year-ago value to $140.77 million, while its net income attributable to WKLP increased 96.4% from its prior-year quarter to $29.51 million. The company's EPS rose 95.3% year-over-year to $0.84.
Analysts expect WLKP's revenue to increase 32% year-over-year to $354.00 million in the first quarter ending March 2022. The consensus EPS estimate of $0.57 for the first quarter ending March 2022 represents a 33.4% improvement year-over-year. The stock has gained 1.6% year-to-date and 6.2% over the past six months.
WLKP's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock also has an A grade for Quality and a B for Value and Growth. Within the A-rated MLPs – Other industry, it is ranked #1 of 11 stocks. To see additional POWR Ratings for Sentiment, Stability, and Momentum for WLKP, click here.
Marubeni Corporation (MARUY)
Headquartered in Tokyo, Japan, MARUY engages in various business activities worldwide. The company trades in grains, feed ingredients, compound feeds, foods, agricultural and marine products, processed seafood, and fresh and processed meat; and apparel, footwear, lifestyle, and textile and industrial materials.
MARUY's $4.26 annual dividend yields 3.9% on the current share price. It has a five-year average dividend yield of 4.2%.
For the nine months ended December 31, 2021, MARUY's revenue increased 35.1% year-over-year to ¥6218.31 billion ($47.69 billion). The operating profit grew 85.9% from its year-ago value to ¥204.45 billion ($1.57 billion), while its profit for the period improved 100.2% from its prior-year quarter to ¥336.45 billion ($2.58 billion).
The consensus EPS estimate of $19.88 for fiscal 2022 represents 70.3% year-over-year growth. Analysts expect revenue to increase 16.7% year-over-year to $18.49 billion for the fourth quarter ending March 2022. In addition, it has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in all of the trailing four quarters. The company's shares have surged 14.1% year-to-date and 32.1% over the past six months.
MARUY's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The stock also has an A grade for Value and Stability and a B grade for Growth. In the Industrial - Metals industry, it is ranked #3 of 37 stocks.
In total, we rate MARUY on eight different levels. Beyond what we've stated above, we have also given MARUY grades for Quality, Sentiment, and Momentum. Get all the MARUY ratings here.
Natural Resource Partners L.P. (NRP)
NRP, along with its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States. It has two operational segments, Mineral Rights and Soda Ash. The company owns interests in coal, soda ash, trona, and other natural resources.
In February, NRP and Denbury Carbon Solutions, LLC, a wholly-owned subsidiary of Denbury Inc (DEN), executed a CO2 Sequestration Agreement for the evaluation and potential development of a permanent CO2 sequestration site located on Alabama's Gulf Coast. Under this agreement, Denbury will have the exclusive rights to develop a CO2 sequestration site on approximately 75,000 acres of pore space controlled by NRP in Baldwin County, near Mobile, Alabama.
NRP paid a quarterly dividend of $0.45 on February 28, 2022. Its $1.80 annual dividend yields 3.7% on the current share price. It has a four-year average dividend yield of 8.5%. In addition, the company's dividend payouts have increased at a 5.9% CAGR over the past five years.
NRP's total revenues and other income increased 114.2% year-over-year to $83.91 million for the fourth quarter ending December 31, 2021. The income from operations grew 163.3% from its year-ago value to $65.21 million, while its net income improved 278.8% from its prior-year quarter to $55.64 million. The company's EPS rose 332.1% year-over-year to $2.42.
The stock has gained 43.8% year-to-date and 118.5% over the past nine months.
It is no surprise that NRP has an overall A rating, which equates to Strong Buy in our POWR Ratings system. NRP has an A grade for Momentum and a B grade for Quality and Growth. Within the MLPs - Other industry, it is ranked #2. Click here to see the additional POWR Ratings for NRP (Value, Stability, and Sentiment).
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WLKP shares were trading at $27.48 per share on Friday morning, up $0.20 (+0.73%). Year-to-date, WLKP has gained 4.14%, versus a -10.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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