The major stock market indexes have been experiencing wild price swings since the beginning of this year due to the potential of multiple interest rate hikes this year and rising geopolitical tensions between Ukraine and Russia. Given the surging market volatility, investing in stocks that offer a consistent flow of income through dividend payments could be one of the safest strategies.
The recently released Labor Department data shows a 7.5% year-on-year increase in consumer price index versus the Dow Jones estimate of 7.2%. This marks the highest since February 1982. The possibility of the Fed becoming more aggressive to combat the multi-decade high inflation might lead to further stock market volatility in the near term. According to BofA Securities’ U.S. head of equity and quantitative research, Savita Subramanian, “It’s going to be a year where we are shocked by the volatility.”
That’s why today we're highlighting 4 stocks from our Top 10 Income screen, which is just 1 of the 10 outperforming screens in our POWR Screens 10 service (more on that below). In addition to offering a steady income stream, Midland States Bancorp, Inc. (MSBI), Barloworld Limited (BRRAY), SunCoke Energy, Inc. (SXC), and BCB Bancorp, Inc. (BCBP) are well-positioned to witness price appreciation in the near term.
Midland States Bancorp, Inc. (MSBI)
MSBI is a diversified financial holding company. Its segments include banking and wealth management. The banking segment provides a range of financial products and services to consumers and businesses, including commercial equipment leasing, letters of credit, and others. Its wealth segment includes financial estate planning, corporate retirement plan consulting and administration, and retail brokerage services through a third-party broker-dealer.
On January 25, 2022, MSBI announced signing a branch purchase and assumption agreement with FNBC Bank & Trust to acquire deposits, certain loans, and other assets associated with FNBC’s branches in Mokena and Yorkville, Illinois. In addition, the Mokena branch will be acquired by MSBI. President and CEO of MSBI Jeffrey G. Ludwig said, “This transaction will provide additional attractively priced core deposits, while increasing our exposure to faster growing markets in Northern Illinois.”
MSBI’s dividend payouts have grown at a 7.7% CAGR in the last three years. Its four-year average dividend yield is 4.2%, and its current dividend translates to a 3.8% yield. It is expected to pay a quarterly dividend of $0.29 per share on February 18, 2022.
For the fiscal fourth quarter ended December 31, 2021, MSBI’s adjusted net interest income increased 5.5% sequentially to $54.67 million, while its adjusted noninterest income increased 26.2% sequentially to $22.75 million. The company’s non-GAAP net earnings increased 103.8% year-over-year to $25.41 million. Also, its adjusted EPS came in at $1.12, representing an increase of 107.4% year-over-year.
Analysts expect MSBI’s EPS for the quarter ending March 31, 2022, to increase 4.9% year-over-year to $0.85. Its revenue for the quarter ending June 30, 2022, is expected to increase 6.6% year-over-year to $71.99 million. Over the past year, the stock has gained 44.1% to close the last trading session at $29.90.
MSBI’s POWR Ratings reflect solid prospects. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Momentum and a B grade for Value, Stability, and Sentiment. Within the Midwest Regional Banks industry, it is ranked first out of 41 stocks. To see the other ratings of MSBI for Growth and Quality, click here.
Barloworld Limited (BRRAY)
BRRAY operates as an industrial processing, distribution, and services company based in Sandton, South Africa. The company offers industrial equipment and services comprising business-to-business sales, servicing, rebuilding, and salvaging of earthmoving equipment, industrial services, and power systems that enable various mining, construction, and power solutions.
BRRAY’s four-year average dividend yield is 5.2%, and its current dividend translates to a 3.8% yield.
BRRAY’s group revenue for the fiscal ended September 30, 2021, increased 8.3% year-over-year to R53.83 billion ($3.53 billion). The company’s revenue increased 22.5% year-over-year to R41.53 billion ($2.72 billion). Also, its profit came in at R2.80 billion ($0.18 billion), compared to a loss of R2.49 billion ($0.16 billion).
Over the past year, the stock has gained 48.6% to close the last trading session at $9.84.
BRRAY’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A grade for Growth and a B grade for Value, Momentum, and Quality. It is ranked #2 out of 93 stocks in the B-rated Industrial – Services industry. Click here to see the other ratings of BRRAY for Stability and Sentiment.
SunCoke Energy, Inc. (SXC)
SXC operates as an independent producer of coke in the Americas and Brazil. The company operates through the Domestic Coke, Brazil Coke, and Logistics segments. It offers metallurgical and thermal coal. It also provides handling and/or mixing services to steel, coke, electric utility, coal producing, and other manufacturing-based customers.
SXC’s four-year average dividend yield is 2.2%, and its current dividend translates to a 3.1% yield. It is expected to pay a quarterly dividend of $0.06 per share on March 1, 2022.
SXC revenues for the fiscal fourth quarter ended December 31, 2021, increased 17.8% year-over-year to $365.30 million. The company’s adjusted EBITDA increased 70% year-over-year to $62.90 million. Also, its net income came in at $12.70 million, compared to a net loss of $5 million in the year-ago period.
For the quarter ending June 30, 2022, SXC’s EPS is expected to increase 272.7% year-over-year to $0.19. Its revenue for the quarter ending March 31, 2022, is expected to increase 20.6% year-over-year to $372 million. Over the past year, the stock has gained 31.8% to close the last trading session at $7.70.
SXC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and Momentum and a B grade for Value, Sentiment, and Quality. It is ranked first out of 11 stocks in the A-rated Coal industry. Click here to see the rating of SXC for Stability.
BCB Bancorp, Inc. (BCBP)
BCBP provides banking products and services to businesses and individuals in the United States. The company offers deposit products, including savings and club accounts, interest and non-interest-bearing demand accounts, money market accounts, certificates of deposit, and individual retirement accounts. It also provides commercial and multi-family real estate loans, one-to-four family credit, consumer loans, and residential loans.
BCBP’s dividend payouts have grown at a 3.4% CAGR in the last three years. Its four-year average dividend yield is 4.5%, and its current dividend translates to a 3.4% yield. It is expected to pay a quarterly dividend of $0.16 per share on February 15, 2022.
For the fiscal ended December 31, 2021, BCBP’s net income increased 64.2% year-over-year to $34.20 million. The company’s EPS came in at $1.92, representing an increase of 68.4% year-over-year, while its EPS for the fourth quarter ending December 31, 2021, increased 48.7% year-over-year to $0.61.
Analysts expect BCBP’s EPS and revenue for the quarter ending March 31, 2022, to increase 25% and 8.4% year-over-year to $0.50 and $26.32 million, respectively. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 44.3% to close the last trading session at $18.40.
BCBP’s POWR Ratings reflect solid prospects. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Momentum, Stability and Sentiment, and a B grade for Value. It is ranked first out of 55 stocks in the B-rated Northeast Regional Banks industry. To see the ratings of BCBP for Growth and Quality, click here.
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MSBI shares were trading at $29.55 per share on Monday afternoon, down $0.35 (-1.17%). Year-to-date, MSBI has gained 20.37%, versus a -7.86% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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