All the Wall Street firms 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 stocks that usually have big upside to the assigned target price. With the fourth-quarter earnings season starting to wind down, many firms have tweaked their lists to account for potential changes for the rest of the first quarter and the balance of 2022.

The analysts at Raymond James who contribute to the firm’s well-respected Analysts Current Favorites list of stocks to buy offer one of the stocks in their coverage space for inclusion in the list. Hence, it is considered the favorite choice.

We screened the list looking for companies that are not overextended or overbought and also pay solid and dependable dividends to shareholders. We found six that look like very good ideas for growth and income investors looking to reset portfolios for the rest of the year. While these stocks have Raymond James’s highest Strong Buy rating, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

APA

This company was long considered an industry leader when it was known as Apache, and the stock is perhaps offering one of the best entry points in the sector. APA Corp. (NYSE: APA) explores for and produces oil and gas properties. It has operations in the United States, Egypt and the United Kingdom, as well as has exploration activities offshore Suriname. It also operates gathering, processing and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines.

The company is one of the largest U.S. exploration and production companies, with 2.3 billion barrels of oil equivalent of proven reserves (63% liquids). It is an explorer, acquirer and exploiter a fiscally conservative company that has grown its reserves and production consistently via acquisitions and organic projects.

Shareholders receive a 1.52% dividend. The Raymond James price target for APA stock is $53, while the analysts’ consensus target is much lower at $38.22. The final trade for Wednesday came in at $33.43 a share.

The shares of this company have had a nice move and look poised to trade higher. Kite Realty Group Trust (NYSE: KRG) is a full-service, vertically integrated real estate investment trust (REIT) that provides communities with convenient and beneficial shopping experiences.

The company connects consumers to retailers in desirable markets through its portfolio of neighborhood, community and lifestyle centers. Using operational, development and redevelopment expertise, the company continuously optimizes its portfolio to maximize value and return to its shareholders.

Shareholders are paid a 3.45% distribution. Raymond James has a $25 price target, and the consensus target is $25.75. Kite Realty stock closed on Wednesday at $21.84, which was nearly a 5% gain for the day.

Public Storage

This giant self-storage leader has always been a go-to REIT stock for income investors. Public Storage Inc. (NYSE: PSA) is a fully integrated, self-administered and self-managed REIT that primarily acquires, develops, owns and operates self-storage facilities.

As of September 30, 2020, the company had interests in 2,504 self-storage facilities located in 38 states with approximately 171 million net rentable square feet in the United States. It had an approximate 35% common equity interest in Shurgard Self Storage, which owned 239 self-storage facilities located in seven Western European nations with approximately 13 million net rentable square feet operated under the Shurgard brand.

Furthermore, Public Storage had an approximate 42% common equity interest in PS Business Parks, which owned and operated approximately 28 million rentable square feet of commercial space.

Public Storage stock investors receive a 2.21% distribution. The $375 Raymond James price objective is less than the $386.29 consensus target. Wednesday’s closing share price was $369.19.

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 6.47% distribution. Raymond James has set a $16.50 price target. The consensus target for Redwood Trust stock is $15.41, and the shares ended Wednesday trading at $12.20 apiece.

Targa Resources

This top energy midstream company is structured as a C-corporation and is on many Wall Street top stock picks lists.

Targa Resources Corp (NYSE: TRGP) is a leading provider of midstream services and one of the largest independent midstream energy companies in North America. Targa owns, operates, acquires and develops a diversified portfolio of complementary midstream energy assets.
The company is primarily engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling natural gas liquids and related products, including services to liquefied petroleum gas exporters; gathering, storing and terminaling crude oil; storing, terminaling and selling refined petroleum products.

Targa Resources has one of the premier asset positions in the Permian Basin. With solid management, a strong balance sheet and attractive exposure to some of the most attractive U.S. energy basins, it remains a top pick across Wall Street.

Investors in Targa Resources stock receive a 2.28% dividend. The Raymond James price objective of $70 is higher than the $68.55 consensus target price. The shares closed on Wednesday at $62.40.

Valero Energy

This Wall Street favorite is a solid energy play for conservative investors looking for safer ideas. Valero Energy Corp. (NYSE: VLO) is one of the largest independent petroleum refining and marketing companies in the United States. It is based in San Antonio, Texas; owns 13 refineries in the United States, Canada and Europe; and has a total throughput capacity of around 2.5 million barrels per day.

Valero also is a joint venture partner in Diamond Green Diesel, which operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America’s largest biomass-based diesel plant.

Valero sells its products in the wholesale rack or bulk markets in the United States, Canada, the United Kingdom, Ireland and Latin America. Approximately 7,400 outlets carry Valero’s brand names.

The dividend yield is 4.43%. The Raymond James analysts have a huge $104 price target. The posted consensus target was last seen at $94.30, and Valero Energy stock closed on Wednesday at $88.84 per share.

While none of these stocks will be making any massive parabolic moves higher soon, they are safer ideas for nervous investors concerned about the potential for inflation to wreak havoc on the economy in 2022. Note that REIT distributions can contain return of principal.

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