Investors are grappling with various market challenges, including the impact of the Federal Reserve’s interest rate policy, a potential government shutdown, declining consumer confidence, and rising oil prices. In light of these conditions, high-yield dividend stocks are gaining attention as attractive defensive plays. Wall Street analysts have identified two such stocks that offer a dividend yield of at least 10% and the potential for share appreciation of up to 40% in the coming year.
OneMain Holdings is a financial services company that focuses on providing consumer services to sub-prime banking loan customers. The company offers a range of financial products, such as personal loans and insurance, to customers who may not qualify for services from traditional banks. Despite an earnings miss, OneMain remains committed to generous capital returns through share buybacks and dividend payments. The company recently declared a dividend of $1 per share, marking the third consecutive quarter at this level and resulting in a strong forward yield of 10.2%. Analysts believe OneMain is well-positioned to weather any market turndown and have set a price target of $57, implying a potential upside of 44%.
Kimbell Royalty Partners, an energy firm based in Texas, specializes in buying mineral rights across North America’s productive hydrocarbon regions. The company receives royalties from third-party operators conducting extraction businesses on its lands and wells. Kimbell recently made a significant acquisition of royalty holdings in the Permian and Mid-Continental basins, which is expected to boost its production in the coming years. The company’s quarterly production has already reached a record high, and it paid out a solid dividend of 39 cents per common share for Q2. With a strong balance sheet and attractive distributions, analysts rate Kimbell as a Buy with a price target of $22, indicating a potential upside of 41%.
In today’s challenging market conditions, high-yield dividend stocks like OneMain Holdings and Kimbell Royalty Partners are gaining attention as investors seek protection and passive income. These companies have strong positions in their respective industries and are expected to weather any macroeconomic headwinds. With the potential for significant share appreciation and attractive dividend yields, these stocks present compelling investment opportunities.