High-yield dividend stocks that are currently being shunned by Wall Street analysts may present an opportunity for contrarian investors. Analysts, who are typically bullish on the companies they cover, tend to follow trends rather than conduct thorough analysis. Therefore, stocks that are out of favor with analysts could be a starting point for independent research. In this article, seven stocks with dividend yields of up to 12.9% are highlighted, all of which are disliked by Wall Street professionals.
Xerox, an aging tech company, offers a 7.2% dividend yield despite stagnant dividend growth and a lack of innovative business strategies. Analysts remain unenthusiastic about Xerox due to its lack of growth potential. Similarly, Western Union, a money transfer company, is struggling to keep up with technological advancements and is losing market share to competitors like PayPal. While its 7.1% dividend yield is attractive, analysts have mostly negative ratings on the stock.
Real estate investment trust (REIT) Alexander’s, which owns office properties in New York City, has been hit hard by the pandemic and subsequent decline in office demand. The company’s dividend coverage has also been a concern for investors. Conversely, Peakstone Realty Trust, a relatively new REIT, has faced challenges since going public, causing its stock price to plummet. However, the company is making efforts to reposition its portfolio and improve its financial position.
National Storage Affiliates Trust, a self-storage REIT, has faced headwinds due to a slowdown in the housing market and oversupply in the self-storage industry. While analysts have mixed opinions on the stock, management and dividend coverage remain strong. Additionally, Buckle, a fashion retailer, offers a 10.0% dividend yield and has a shareholder-friendly management team, despite recent operational weaknesses. Prospect Capital, a business development company with a 12.9% yield, has struggled with dividend cuts and share price declines, but recent positive quarterly results offer hope for a turnaround.
These high-yield dividend stocks with negative sentiment from Wall Street analysts may present attractive opportunities for investors willing to do their own research and take a contrarian approach. While these companies face challenges in their respective industries, strong dividend coverage and potential for growth could make them appealing investments for income-focused investors. It is important for investors to conduct thorough due diligence and consider their risk tolerance before investing in these stocks.
