3 Dividend-Paying Stocks Wall Street Analysts Predict Will Rally 45% or More

The major stock market indexes plunged on Thursday as big tech shares fell sharply, causing the NASDAQ Composite Index to shed 385.15 points or 2.47% to close at 15,180.43. The Dow Jones Industrial Average fell 29.79 points to close at 35,897.64, while the S&P 500 declined  0.8% to close at 4,668.67. The markets have remained volatile as investors gauge economic growth prospects and rising COVD-19 omicron cases.

In November, inflation surged to a 6.8% 40-year high because consumer prices have risen at their fastest clip  since 1982. Inflationary pressures have forced the Fed to act, and it promised to halt its pandemic-driven asset purchases early next year, giving way to three interest rate hikes in 2022 to counter the inflation threat. Meanwhile, the omicron variant has spooked investors as top Federal health officials warn that the variant is spreading rapidly and could peak by next month.

Amid this market uncertainty, we think it could be wise to bet on quality dividend-yielding stocks to hedge one’s portfolio against market volatility by ensuring a steady income stream. So, it could be wise to add quality dividend-paying stocks Thor Industries, Inc. (THO), Select Medical Holdings Corporation (SEM), and Tecnoglass Inc. (TGLS) to one’s  portfolio. Furthermore, Wall Street analysts expect these stocks to rally more than 45% in price near-term.

Thor Industries, Inc. (THO)

Elkhart, Ind.-based THOR manufactures and sells a range of recreational vehicles (RVs), parts, and accessories across the United States and Canada. It offers travel trailers and fifth wheels, luxury fifth wheels, motorvans, caravans, campervans, and urban vehicles. Also, its segments include the North American Towable Recreational Vehicle, North American Motorized Recreational Vehicle, and European Recreational Vehicle segments.

On December 7,THO announced the acquisition of Elkhart Composites by its subsidiary Airxcel, Inc. Elkhart develops and sells a proprietary sustainable foamed polypropylene-based composite material. Elkboard is used in the RV industry for sidewalls because it is lightweight, rigid, and durable, which helps alleviate the industry’s dependence on traditional lauan-based sidewalls. This acquisition bodes well for THO. Unlike the lauan-based sidewalls, the Elkboard is sustainable and is not susceptible to rot or delamination.

The company began paying dividends in 1989. Over the last three years, THO’s dividend payout has grown at a 3.44% CAGR, while its four-year average dividend yield is 1.89%, and its current dividend yield translates to a 1.74% yield. THO is expected to pay a $0.43 per share quarterly dividend on January 13, 2022.

THO’s net sales for its fiscal first quarter, ended October 31, 2021, increased 56% year-over-year to $3.96 billion. The company’s net income increased 113% year-over-year to $242.24 million. Its EPS came in at $4.34, up 111.7% year-over-year.

Analysts expect THO’s EPS for the quarter ending January 31, 2022, to increase 42.4% year-over-year to $3.39. Its revenue for its fiscal year 2022 is expected to increase 22.9% year-over-year to $15.14 billion. Also, it has surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has declined 33.3% in price to close yesterday’s trading session at $98.68. However, Wall Street analysts expect the stock to hit $147.50 in the near term, indicating a potential 49.4% upside.

THO’s POWR Ratings reflect solid prospects. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting. It has a B grade for Growth and Value. In the Auto & Vehicle Manufacturers industry, it is ranked #25 out of 67 stocks. Click here to see the other ratings of THO for Momentum, Stability, Sentiment, and Quality.

Click here to check out our Automotive Industry Report for 2021

Recently the Reitmeister Total Return Portfolio (RTR) closed a winning trade in THO for a 55% gain. Learn more about the RTR service here.

Select Medical Holdings Corporation (SEM)

SEM in Mechanicsburg, Pa., operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States. The company operates in critical illness recovery, rehabilitation, outpatient, and concentra segments.

On June 21, 2021, SEM announced that it has entered a series of transactions to operate seven new critical illness recovery hospitals licensed as long-term acute care and eight new outpatient clinics through acquisitions and joint ventures. These acquisitions and partnerships should allow SEM to grow strategically and expand its business.

The company began paying dividends in 2012. SEM’s four-year average dividend yield is 0.09%, and its current dividend yield translates to a 1.33% yield. SEM paid a  $0.125 per share quarterly dividend  on November 29, 2021.

For its fiscal third quarter, ended September 30, 2021, SEM’s revenue increased 7.8% year-over-year to $1.53 billion. Also, its net income for the nine months ended September 30, 2021, increased 78.9% year-over-year to $433.63 million.

For its fiscal year 2021, SEM’s EPS and revenue are expected to increase 61.9% and 10.3%, respectively, year-over-year to $3.06 and $6.10 billion. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past six months, the stock has declined 33.8% in price to close yesterday’s trading session at $28.15. However, Wall Street analysts expect the stock to hit $48 in the near term, indicating a potential 70.5% upside.

SEM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. It has a B grade for Value, Stability, and Sentiment. Within the 14-stock Medical – Hospitals industry, it is ranked #4. To see the other rankings of SEM for Growth, Momentum, and Quality, click here.

Click here to checkout our Healthcare Sector Report for 2021

Tecnoglass Inc. (TGLS)

Headquartered in Barranquilla, Colombia, TGLS manufactures architectural glass and windows for residential and commercial construction industries. It manufactures a range of glass products installed in commercial and residential buildings, including tempered safety, double thermo-acoustic, and laminated glass. TGLS also produces aluminum products, such as profiles, rods, bars, plates, and other hardware used to manufacture windows.

The company began paying dividends in 2016. TGLS’ four-year average dividend yield is 5.01%, and its current dividend yield translates to a 1.07% yield. TGLS is expected to pay a quarterly dividend of $0.065 per share on January 31, 2022.

TGLS’ total revenue for its fiscal third quarter, ended September 30, 2021, increased 26% year-over-year to $130.40 million. The company’s adjusted EBITDA increased 36.1% year-over-year to $38.70 million. And its adjusted EPS came in at $0.45, up 60.7% year-over-year.

Analysts expect TGLS’ EPS and revenue for its fiscal year 2021 to increase 106.3% and 31.3%, respectively, year-over-year to $1.63 and $492.39 million It has surpassed the Street’s EPS expectations in each of the trailing four quarters. The stock has declined 24.7% in price over the past month to close yesterday’s trading session at $24.40. However, Wall Street analysts expect the stock to hit $36 in the near term, indicating a potential 47.5% upside.

TGLS’ strong prospects are reflected in its POWR Ratings. The stock has an overall B rating, which equated to a Buy in our proprietary rating system. It has an A grade for Sentiment and a B grade for Momentum and Quality. It is ranked #10 of 53 stocks in the Industrial – Building Materials industry. Click here to see the other ratings of TGLS for Growth, Value, and Stability.

Click here to check out our Industrial Sector Report for 2021

THO shares were trading at $99.23 per share on Friday afternoon, up $0.55 (+0.56%). Year-to-date, THO has gained 7.85%, versus a 25.05% rise in the benchmark S&P 500 index during the same period.

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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