While most of Wall Street focuses on large-cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.
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Many investors, especially more aggressive traders, look at lower-priced stocks as a way not only to make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database looking for smaller cap companies that could very well offer patient investors some huge returns for the rest of 2022 and beyond. Skeptics of low-priced shares should remember that at one point both Amazon and Apple traded in the single digits. One stock we featured over the years, Zynga, recently was purchased by Take-Two Interactive. Cogent Biosciences, which we featured in March, has tripled.
While all five of these stocks are rated Buy, it is important to remember that no single analyst report should be used as the sole basis for any buying or selling decision.
Annaly Capital Management
This stock is trading well under $10, which gives aggressive investors a chance to really load up on the shares. Annaly Capital Management Inc. (NYSE: NLY), a diversified capital manager, engages in mortgage finance and corporate middle market lending.
The company invests in agency mortgage-backed securities, mortgage-servicing rights, agency commercial mortgage-backed securities, non-agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts and other commercial real estate investments. It has elected to be taxed as a real estate investment trust (REIT).
The company posted massive second-quarter earnings and revenue results that beat analyst expectations. Trading at a tiny 2.6 times earnings, it offers aggressive investors a huge opportunity.
Shareholders receive a 14.64% dividend. Barclays has a $7 target price on Annaly Capital Management stock. The consensus target is $6.53, and shares traded at $5.75 on Friday.
Antero Midstream
With shares trading just under $10 apiece, this very well-run company offers a huge total return package. Antero Midstream Corp. (NYSE: AM) owns, operates and develops midstream energy infrastructure. It operates through two segments.
The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources’ wells in West Virginia and Ohio.
The Water Handling segment delivers fresh water and offers other fluid handling services, such as wastewater transportation, disposal and treatment, as well as high-rate transfer services.
Antero Midstream stock investors receive a 9.22% distribution. Wells Fargo recently lifted its $12 target price to $13. The consensus target is $10.57, and shares traded at $9.05 on Friday.
Barings BDC
This off-the-radar business development company’s stock offers solid total return potential. Barings BDC Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company that has elected to be treated as a BDC under the Investment Company Act of 1940. Barings BDC seeks to invest primarily in senior secured loans to private U.S. middle-market companies that operate across a wide range of industries.
Barings BDC specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing and recapitalizations in lower middle market, mature and later stage companies. Barings BDC’s investment activities are managed by its investment adviser, Barings, a leading global asset manager based in Charlotte, N.C., with over $335 billion of assets under management firmwide.
The dividend yield is 9.51%. The Jefferies price target of $12.50 is higher than the $11.46 consensus target. On Friday, shares traded at $8.95 apiece.
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New York Community Bancorp
This somewhat off-the-radar company pays a huge dividend and is an attractive idea for investors also looking to own financials now. New York Community Bancorp Inc. (NYSE: NYCB) operates as the bank holding company for New York Community Bank, which provides banking products and services in New York, New Jersey, Ohio, Florida and Arizona.
The company accepts various deposit products, such as interest-bearing checking and money market, savings, non-interest-bearing and individual retirement accounts, as well as certificates of deposit. Its loan products include multifamily loans; commercial real estate loans; specialty finance loans and leases; and commercial and industrial loans; acquisition, development and construction loans; one-to-four family loans; and consumer loans.
The company also offers annuities, life and long-term care insurance products and mutual funds; cash management products; and online, mobile and phone banking services. It primarily serves individuals, small and midsize businesses, and professional associations through a network of 237 community bank branches and 340 ATM locations.
Shareholders receive a 7.26% dividend. The $11 BofA Securities price target compares with an $11.36 consensus target. New York Community Bancorp stock traded at $8.80 on Friday.
Oaktree Specialty Lending
This lower-priced BDC stock offers investors the ability to buy more shares. Oaktree Specialty Lending Corp. (NASDAQ: OCSL) specializes in investments in middle-market, bridge financing, first and second lien debt financing, mezzanine debt, senior and junior secured debt, expansions, sponsor-led acquisitions, and management buyouts in small and midsized companies.
The fund seeks to invest in education services, business services, retail and consumer, health care, manufacturing, food and restaurants, construction and engineering, and media and advertising sectors. It invests between $5 million to $75 million principally in the form of one-stop, first lien and second lien debt investments, which may include an equity co-investment component in companies with enterprise value between $20 million and $150 million and EBITDA between $3 million and $50 million. The fund has a hold size of up to $75 million and may underwrite transactions up to $100 million. It primarily invests in North America, and the fund seeks to be a lead investor in its portfolio companies.
This stock comes with a 9.70% dividend. Jefferies has set an $8.50 price target. The $8.07 consensus target also compares with a share price of $6.10 seen on Friday.
These are five stocks for aggressive investors looking to get share count leverage on companies that have sizable upside potential. While not suited for all investors, they are not penny stocks with absolutely no history or liquidity, and major Wall Street firms have research coverage. that they all pay huge dividends can be a nice kicker in this bear market.
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