The stock market’s four-week rally ended last week, but the prior month of gains provided the best results that beleaguered stock investors have seen since late last year. Despite some wishful thinking across Wall Street, it is unlikely the hoped-for “Fed pivot” will be coming any time soon.
Federal Reserve President Bullard said late last week he was on board with yet another 75-basis-point increase in the federal funds rate in September. Unless the inflation rate data comes in drastically lower for August, that may be the call.
So, what do investors do to fight the debilitating effects of inflation and rising interest rates? Buy stocks that have hard-asset plays, in addition to real estate investment trusts (REITs), shipping stocks and business development companies that also pay double-digit yields.
We found six top stocks that are Buy rated across Wall Street and are very solid ideas during these volatile times. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Broadmark Realty
Similar to a mortgage REIT, this top company is an investor in what is known as deed of trust loans. Broadmark Realty Capital Inc. (NYSE: BRMK) engages in the underwriting, funding, servicing and managing of a portfolio of short-term and first deed of trust loans to fund the construction, development and investment in residential or commercial properties in the United States.
Because the company has elected to be taxed as a real estate investment trust, it is not subject to corporate income tax on that portion of its net income that is distributed to shareholders.
Investors receive an 11.95% distribution. B. Riley Securities has a $9 target price, and the consensus target is $8.17. Friday’s final trade was reported at $7.03.
Ellington Financial
This quality mortgage REIT is a Wall Street favorite. Ellington Financial Inc. (NYSE: EFC) through its subsidiary Ellington Financial Operating Partnership, acquires and manages mortgageelated, consumerelated, corporateelated and other financial assets in the United States.
The company acquires and manages residential mortgage-backed securities (RMBSs) backed by prime jumbo, Alt-A, manufactured housing and subprime residential mortgage loans; RMBSs for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity; residential mortgage loans; commercial mortgage-backed securities; and commercial mortgage loans and other commercial real estate debt.
Ellington Financial also provides collateralized loan obligations, mortgageelated and non-mortgageelated derivatives, corporate debt and equity securities, corporate loans and other strategic investments. In addition, the company offers consumer loans and asset-backed securities backed by consumer and commercial assets.
Investors take home an 11.53% dividend. The Piper Sandler target price is $17, while the consensus target is $16.59. The shares closed on Friday at $15.52.
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