All the investment firms and banks that we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the companies they not only like on a longer term basis, but those with stocks that usually have solid upside potential to the assigned target price. With August and the summer almost over, and the weak seasonal time of year right around the corner, many firms on Wall Street have tweaked their lists to account for potential changes the rest of the quarter and 2021.
The analysts at Raymond James who contribute to the firm’s well-respected Analysts Current Favorites list of stocks to Buy have to provide one stock in their coverage space for inclusion in the list. Hence, it is considered the favorite choice.
We have been reminding readers that the stock market has not had a 5% correction in almost a year. So we screened the list looking for stocks that are not overextended or overbought and that are solid ideas in a very pricey stock market. We found five that look like very good ideas for growth investors seeking to reset portfolios to safer sectors. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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Cigna
This is a solid value buy in the health care sector. Cigna Corp. (NYSE: CI | CI Price Prediction) is a major health services organization that provides insurance and related products and services in the United States and internationally. All products and services are provided exclusively by or through operating subsidiaries of Cigna, including Cigna Health and Life Insurance Company, Life Insurance Company of North America, Cigna Life Insurance Company of Canada and their affiliates.
The health care giant offers an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits and other related products, including group life, accident and disability insurance. Cigna maintains sales capability in 30 countries and jurisdictions, and it has approximately 86 million customer relationships throughout the world.
Investors receive a 1.95% dividend. The Raymond James price target for the stock is $275, and the Wall Street consensus target is $240.64. Cigna stock closed trading on Wednesday at $205.60.
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Hancock Whitney
This regional bank is based in the South and offers solid growth and a nice dividend as well. Hancock Whitney Corp. (NYSE: HWC) operates as the bank holding company for Hancock Whitney Bank, which provides a range of banking products and services to commercial, small business and retail customers.
The company accepts various deposit products, such as non-interest-bearing demand deposits, interest-bearing transaction accounts, savings accounts, money market deposit accounts and time deposit accounts. Its loan products include commercial and industrial; commercial real estate; construction and land development; residential mortgages, including fixed and adjustable rate loans; consumer loans comprising second lien mortgage home loans, home equity lines of credit, and nonresidential consumer purpose loans; revolving credit facilities; and letters of credit and financial guarantees.
The company also offers investment brokerage and treasury management services, and annuity and life insurance products; and trust and investment management services to retirement plans, corporations, and individuals, as well as holds foreclosed assets. It operates 208 full-service banking and financial services offices, and 275 automated teller machines in Mississippi, Alabama, Louisiana, Florida and Texas. It also operates a loan production office in Nashville, Tennessee.
Shareholders receive a 2.42% dividend. Raymond James has a $54 price target, which compares with the lower $50.83 consensus target and Wednesday’s closing print of $44.55.
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National Retail Properties
This is one of the largest real estate investment trusts, and it is a solid choice for investors looking to capitalize on retail returning to normal. National Retail Properties Inc. (NYSE: NNN) invests primarily in high-quality retail properties subject generally to long-term net leases. As of September 30, 2020, the company owned 3,114 properties in 48 states with a gross leasable area of approximately 32.4 million square feet and with a weighted average remaining lease term of 10.7 years.
Earlier this month, the retail real estate investment trust (REIT) posted quarterly funds from operations (FFO) that were higher than a year ago and that exceeded the consensus expectations. Earlier this year, it also reported better than expected FFO.
Investors can bank on a very rich 4.52% distribution. The $55 Raymond James price target compares with a $52.23 consensus target and Wednesday’s closing share price of $46.92.
PotlatchDeltic
This is another strong idea for investors nervous about the stock market. PotlatchDeltic Corp. (NASDAQ: PCH) is a leading REIT that owns 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi. The company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program.
A favorite of ESG investors, PotlatchDeltic, is a leader in sustainable forest management. It is committed to environmental and social responsibility and to responsible governance.
In July, the company reported net income and revenues that were far better than the results in the year-ago quarter.
Shareholders receive a 3.31% dividend. Raymond James has set its price objective at $75. That is well above the $63.83 consensus target. Wednesday’s final trade was reported at $49.55.
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Redwood Trust
This is a very solid play for income investors looking for a reasonably safe vehicle. Redwood Trust Inc. (NYSE: RWT) operates as a specialty finance company in the United States. The company operates through three segments.
The Residential Lending segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization or transfer to its investment portfolio. This segment also offers derivative financial instruments to manage risks associated with residential loans.
The Business Purpose Lending segment operates a platform that originates and acquires business purpose loans, such as single-family rental and bridge loans for subsequent securitization or transfer into its investment portfolio.
The Third-Party Investments segment invests in residential mortgage-backed securities issued by third parties, as well as in K-Series multifamily loan securitizations and SLST reperforming loan securitizations. This segment also offers servicer advance and other residential and multifamily credit investments.
The company qualifies as a REIT for federal income tax purposes, and it intends to distribute at least 90% of its taxable income as dividends to shareholders.
Shareholders pocket a sweet 5.91% distribution. Raymond James has a $16 price target. The $14 consensus target is closer to Wednesday’s closing trade of $12.19.
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While none of these stocks soon will be making any massive parabolic moves higher, they are safer ideas for nervous investors to move to as we hit the rocky time of the trading year. Also note that REIT distributions can contain return of principal.
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