The benchmark indexes have witnessed wild price swings since the beginning of the year. Since the market is expected to remain volatile on concerns over high inflation, the ongoing Russia-Ukraine war, and the rising interest rate environment, investing in dividend-paying stocks to generate a consistent income flow could be a preferred strategy.
The consumer price index jumped 7.9% in February, beating the Dow Jones estimate of 7.8%. This is the biggest jump in inflation since January 1982, mainly driven by rising energy and food costs. The stock markets are expected to remain under pressure in the near term as oil prices continue to remain volatile, amid no sign of progress in talks between Russia and Ukraine. A looming oil and gas supply disruption is keeping investors concerned.
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). TIM S/A ADR (TIMB), JBS S.A. (JBSAY), and Blueknight Energy Partners, L.P. (BKEP) could be great additions to your portfolio. These stocks pay steady dividends and possess capital appreciation potential owing to their solid growth prospects.
TIM S.A. (TIMB)
Headquartered in Rio de Janeiro, Brazil, TIMB is a telecommunications company that provides mobile voice and data services, broadband Internet access, value-added services, and other telecommunications services and products. The company offers services for individuals and corporate solutions for small, medium, and large companies. TIMB’s current dividend translates to a 2.1% yield.
For the fiscal fourth quarter ended December 31, 2021, TIMB’s net revenues increased 2.6% year-over-year to R$4.79 billion ($0.95 billion). The company’s reported net income increased 0.2% year-over-year to R$1.01 billion ($0.20 billion). Also, its mobile ARPU increased 2.6% year-over-year to R$27.70 ($5.51). In addition, its normalized EBITDA increased 2.9% year-over-year to R$2.44 billion ($487.53 million).
For the quarter ending March 31, 2022, TIMB’s EPS is expected to increase 44.8% year-over-year to $0.15. Its revenue for the quarter ending September 30, 2022, is expected to increase 17.6% year-over-year to $955.68 million. Over the past three months, the stock has gained 16.3% to close the last trading session at $13.29.
TIMB’s POWR Ratings reflect solid prospects. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has a B grade for Value, Stability, Sentiment, and Quality. Within the A-rated Telecom – Foreign industry, it is ranked #2 out of 47 stocks. To see the other ratings of TIMB for Growth and Momentum, click here.
JBS S.A. (JBSAY)
Headquartered in Sao Paulo, Brazil, JBSAY is engaged in the meat processing sector. The company processes and trades in animal protein worldwide. It offers beef, pork, chicken, and lamb products and by-products, food products, pet food, concentrates, and bresaola. Its segments include Brazil; Seara; JBS USA Beef; JBS USA Pork; and PPC.
On December 13, 2021, JBSAY announced that it had agreed to acquire Italy-based delicatessen Grupo King’s. It will be incorporated by JBSAY’s subsidiary Rigamonti. Under the deal, Rigamonti also received a 20% stake in hog producer Piggly and will hold commercial operations of King’s and Principe. JBSAY Chief Executive Gilberto Tomazoni said, “This deal follows our strategic goal of growing in very high value-added products. It puts us among the leaders in the Italian salumeria sector and also boosts our commercial strategy in the U.S.''
JBSAY’s dividend payouts have grown at a 211.8% CAGR over the last three years. Its four-year average dividend yield is 1.9%, and its current dividend translates to a 5% yield.
JBSAY’s net revenue increased 32.2% year-over-year to R$92.62 billion ($18.43 billion) for the third quarter ended September 30, 2021. The company’s net income increased 142.1% year-over-year to R$7.64 billion ($1.52 billion). Also, its adjusted EBITDA increased 74.2% year-over-year to R$13.92 billion ($2.77 billion).
Analysts expect JBSAY’s revenue for fiscal 2021 to increase 43.1% year-over-year to $68.58 billion. Over the past year, the stock has gained 57.9% to close the last trading session at $15.08.
JBSAY’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Growth and Value and a B grade for Stability and Sentiment. It is ranked #8 out of 84 stocks in the B-rated Food Makers industry. Click here to see the other ratings of JBSAY for Momentum and Quality.
Blueknight Energy Partners, L.P. (BKEP)
BKEP is a master limited partnership company that owns the independent asphalt terminalling network in the country. The company manages its operations through the asphalt terminalling services segment. It provides asphalt terminalling services to refiners, marketers, and distributors of liquid asphalt and asphalt-related products.
On December 13, 2021, BKEP announced that it had entered into a definitive agreement to acquire an asphalt terminal and a 200-acre industrial park. In a separate agreement, the company entered into an agreement to organically expand the storage, logistics, and product capabilities at an existing terminal owned by it. BKEP’s CEO Andrew Woodward said, “We are pleased to announce projects that showcase our ability to identify and execute accretive opportunities with high-quality customers that fully align with our growth strategy and further enhance Blueknight’s asphalt terminalling portfolio.”
BKEP’s four-year average dividend yield is 14.6%, and its current dividend translates to a 5% yield.
BKEP’s total revenues increased 1.4% year-over-year to $30.24 million for the fourth quarter ended December 31, 2021. The company’s net income came in at $8.99 million, compared to a net loss of $29.22 million in the year-ago period. Its EPS came in at $0.06, compared to a loss per share of $0.82 in the year-ago period. Also, its adjusted EBITDA from continuing operations increased 2.4% year-over-year to $13.89 million.
Analysts expect BKEP’s EPS to grow 4% per annum over the next five years. Over the past year, the stock has gained 6.6% to close the last trading session at $3.36.
BKEP’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Quality and a B grade for Value and Sentiment. It is ranked #3 out of 12 stocks in the A-rated MLPs – Other industry. Click here to see the other ratings of BKEP for Growth, Momentum, and Stability.
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TIMB shares were trading at $13.50 per share on Monday afternoon, up $0.21 (+1.58%). Year-to-date, TIMB has gained 15.98%, versus a -6.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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