The Dow and the S&P 500 both closed at new records Wednesday as investors appeared to celebrate Jerome Powell and the Fed’s commitment to doing all they can to support financial markets until the economy recovers completely. Stocks pulled back on Thursday from their highs and the Nasdaq was down 1.5% through late afternoon trading as Wall Street continues to monitor inflation worries.
The Biden administration’s new $1.9 trillion stimulus plan and the vaccine progress have added to inflation concerns as bond selling continues, with yields at their highest levels in over a year.
Despite the quick turn-around in Treasurys, they remain ultra-low by historical standards. Meanwhile, the U.S. economy is projected to grow by around 6% in 2021 and the earnings picture is strong (also read:
Looking Ahead to Q1 2021 Earnings Season).
All of these factors help create a bull case for the rest of the year, even with inflation worries. The benchmark index and the Dow are at new highs, as investors rotate into more cyclical and reopening trades.
Let’s not forget that the Nasdaq has already recovered half of its losses from its recent correction, which was also based on profit-taking from stocks that have soared, in some cases, well over 200% in the last year.
Given the backdrop of rising bond yields and a likely economic boom, we dive into cheap stocks under $20 that sport Treasury-beating dividend yields and are set to grow…
WisdomTree Investments, Inc. ( WETF Quick Quote WETF - Free Report)
Prior Close: $6.14 USD
WisdomTree launched its first ETF back in 2006 and today it has grown into a much larger global exchange-traded product, or ETP (ETP) sponsor. The New York-based ETF and ETP sponsor and asset manager has roughly $69 billion assets under management. The firm boasts an array of ways for people to invest and its business is poised to grow as more retail investors enter the market and ETP investing becomes more popular.
Zacks estimates call for its revenue to climb over 12% in FY21, with FY22 set to come in 5% higher to reach $298.9 million. WisdomTree’s adjusted earnings are expected to climb by 20% and 6%, respectively during this stretch. WETF has consistently topped our bottom-line estimates and its EPS outlook has improved to help it land a Zacks Rank #2 (Buy) right now.
WisdomTree also grabs a “B” grade for Momentum in our Style Scores system and it is part of the Financial- Investment Bank space that rests in the top 2% of our over 250 Zacks industries. WETF shares have skyrocketed 150% in the last year, amid the market’s comeback, to easily outpace its industry’s 100% average climb.
The stock is up 15% in 2021 to more than double the market and at $6.14 a share it trades just below its 52-week highs that it hit on March 15. And WisdomTree still trades 50% below its 2017 levels and even further beneath its 2015 records, which could give it plenty of runway.
WETF is trading near its Zacks Econ sector in terms of forward earnings. Plus, its dividend yield sits at 1.94% to top the rapidly-rising 10-year U.S. Treasury’s 1.73%.
Global Net Lease, Inc. ( GNL Quick Quote GNL - Free Report)
Prior Close: $18.36 USD
Global Net Lease is a real estate investment trust that aims to acquire and manage strategically-located commercial real estate properties. The company’s portfolio spans from the U.S. to the U.K., Germany, and beyond. In fact, it now has properties in ten countries, after it expanded into Italy and Spain last year. The REIT is focused primarily on investment grade corporate tenants in mission-critical industrial, distribution, and office properties.
GNL has posted solid top-line growth for years and it’s coming off 8% revenue growth in 2020. The company’s sales are projected to jump by another 12.5% this year and 6.5% in FY22 to hit $395.4 million. And its adjusted funds from operations or AFFO, which are essentially earnings, are projected to climb 17% this year and another 10% next year.
Global Net Lease’s positive post-release EPS revisions help it grab a Zacks Rank #2 (Buy) right now. The stock also rocks an “A” grade for Momentum and a “B” for Value in our Style Scores system and two of the five broker recommendations Zacks has for the stock are “Strong Buys,” with none below a “Hold.”
GNL has doubled its industry in the past year, up 105% and it has popped 8% in 2021. Its shares are trading 5% below its late-February highs and over 30% off where they were when it entered the market in 2015.
The stock is trading at its own one-year median and at a 50% discount to the Real Estate market and the REIT industry at 9X forward earnings. Most importantly, Global Net Lease’s dividend yield sits at a whopping 8.7% to crush its industry’s 3.24% average.
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