Equity income investing has gained enormous traction amid the pandemic as the average investor is trying to secure a steady income with interest rates so low. The stock market is making new highs, yet investing has become riskier with the health of the economy in doubt. As long as the Fed keeps us in a low interest rate environment, now is a great time more than ever to consider dividend investing…
Dividend payments fell by $42.5 billion in the second quarter, compared to the year-ago quarter, as many companies were forced to cut their payouts due to weak sales and cash-flows. This was the largest decline since the first quarter of 2009, when the economy witnessed the Great Recession. However, some companies were able to survive this unprecedented time due to their robust financial and business strength, and therefore did not slash their dividends.
Based on an impressive dividend payout history, Enviva Partners (EVA), Oaktree Specialty Lending Corporation (OCSL), Horizon Technology Finance Corporation (HRZN) and MIND C.T.I. Limited (MNDO) could be good additions to your portfolio.
Enviva Partners (EVA)
EVA focuses on production and distribution of utility-grade wood pellets to power generators. The company specializes in sustainable wood bio-energy. Its manufacturing facilities provide utility customers with reliable, renewable fuel to replace coal and complement wind and solar technologies.
The stock has been uniformly paying quarterly dividends since 2015 and has been consistently increasing the payout amount each quarter. The most recent quarterly dividend declared by the company was $0.765 for the second quarter that ended in June 2020. This was an increase of 15.9% from the year-ago quarter. The annual dividend for the company cumulates to $3.06, translating into a yield of 7.45%.
EVA generated a negative free cash flow of $7.4 million in its last reported quarter, improving significantly compared to the negative cash flow of $20.78 million in the year-ago quarter. Cash flow from operations increased 44.4% year-over-year to $25.75 million.
Net income came in at $8.5 million as compared to net loss of $3.8 million in the year-ago quarter. EPS for the quarter came in $0.26 compared to the year-ago negative EPS of $0.2. Lumber and wood product stocks have had significant growth over the last couple of years due to rising demand and increasing application diversity. Hence, the street expects EVA’s EPS to grow 56.2% in the current year, to $1.64.
EVA has recently completed the acquisition of Georgia Biomass, a leading global energy company specializing in sustainable wood bioenergy, and its Waycross Production Plant. The deal will help the company to work closely with local leaders, private forest landowners, and conservation organizations to continue to make a positive impact. Moreover, the company is planning a recapitalization and a new equity commitment to finance future growth.
EVA has nearly doubled from its March low of $20.63. It is currently trading just 5.3% lower than its 52-week high of $43.42. It closed yesterday’s trading session at $41.12, gaining more than 10% year-to-date.
How does EVA stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Industry Rank
A for Overall POWR Rating
Oaktree Specialty Lending Corporation (OCSL)
OCSL is a business development financial firm that lends to and invests in small and mid-sized companies in North America, primarily in connection with investments by private equity sponsors. The company seeks to invest in services like education, business, retail and consumer, healthcare, manufacturing, restaurants, construction, and media sectors.
The stock had been consistently paying a fixed amount of $0.095 as quarterly dividends since 2018. But it has recently increased its dividend payout by 11%, declaring a dividend of $0.105 for fiscal third quarter ended June 2020. The dividend has…
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