2 Strong Buy Stocks With Stellar Dividends

Last week, the S&P 500 eked out another modest gain, rising roughly 0.5%. Inflation is still running above the Fed’s 2% goal, while Fed Chair Kevin Warsh’s remarks at Jackson Hole reinforced the possibility that a rate hike could come as soon as September. 

That doesn’t necessarily mean stocks are headed for trouble. But after a strong run this year, with valuations elevated and monetary policy once again becoming a bigger part of the conversation, investors have good reason to think more carefully about where their returns are coming from.

Capital appreciation is only one part of the equation. Dividend-paying stocks can provide investors with a regular stream of income even when broader market gains become harder to come by — and can make periods of choppy or sideways trading a little easier to stomach.

Of course, a high yield alone doesn’t make a stock attractive. What matters is finding companies with the financial strength and underlying fundamentals to support those payouts over time.

And one of the easiest ways to narrow down that search is by turning to…

Income Stock Strategy

Our proprietary quant rating system evaluates 4,600 stocks on a daily basis through the lens of 115 fundamental factors and metrics. The insights derived from this analysis are distilled into a simple, user-friendly metric — a stock’s Zen Rating.

A Zen Rating of A, equivalent to a Strong Buy recommendation, is only given to the stocks that rank in the top 5% for overall fundamentals. That means that there are 230 A-rated stocks on any given day. That’s a great start — but you can expedite your research process even further — by taking a look at one of our exclusive Zen Strategies.

There are 11 Zen Strategies portfolios in total. Each consists of just 7 carefully selected stocks. Today, we’ll be taking a look at a portfolio that provided an 18.27% gain since the start of the year, handily outpacing the S&P 500’s 12.44% gain in the same timeframe. This week, the spotlight is on 2 tickers from our Income Stock Strategy. 

Permian Resources (PR)

Our first pick, Permian Resources, is an oil and natural gas producer. PR currently ranks in the top 1% of the stocks we track for overall fundamental strength, and it’s the top-rated stock in the A-rated Oil and Gas industry.

When it comes to our Growth Component Grade rating, Permian Resources shares rank in the top 12%. Next up, we have Momentum — where PR ranks in the top 10% thanks to a 57% gain on the 1-year chart. From there, we have a placement in the top 6% for Financials, and the top 3% for Sentiment, indicating a strong balance sheet in tandem with significant smart money interest.

The one drawback in the fundamental profile is Safety — a category where PR ranks in the bottom third of the stocks we track. This stems in large part from the volatility inherent to oil producers — and is a fair tradeoff when contrasted to the wide array of positives. So what about the dividend? PR currently has a forward dividend yield of 3.43%, at a sustainable payout ratio of 40%.

Despite the strong rally already on the books, PR’s growth trajectory is more than just intact. Fueled by that strong balance sheet, the company has embarked on a series of acquisitions this year, adding 54,000 net leasehold acres and approximately 330 net drilling locations. With a strong fundamental cluster centered on Growth, Momentum, and Sentiment, the prospect of capital appreciation in tandem with a respectable dividend is worth a closer look.

Crawford & Co. (CRD.A)

Our second pick is Crawford & Co. This global provider of claims management and outsourcing services for insurers ranks in the top 1% of all the stocks we track, and it’s the top-rated stock in the Insurance industry. The company’s dividends have increased over the past 10 years, and it currently has a modest dividend yield of 1.76%.

Where it truly shines, however, are the fundamentals. CRD.A has the type of well-balanced profile you rarely see. The weakest Component Grade on the board, Momentum, comes in at the top 41% — still above the market average.

The cluster of strength begins with Growth, which ranks in the top 20% of the market. The next order of business is Value — and thanks to a PEG ratio of just 0.27x, Crawford & Co. ranks in the top 14% in this category. Safety and Financials come in at the top 10% and 7%, respectively. The star of the show, however, is Sentiment, our smart money rating — and in this category, CRD.A is in the top 2% of the entire market.

Simply put, Crawford & Co. does not have any glaring fundamental weaknesses. What it does have is two significant, and, more importantly, recent catalysts. The last earnings report, published on August 3, saw EPS growth of 69% on a year-over-year basis, and a week later, management agreed to repurchase 1 million shares.

Interested In More Great Stock Picks? 

The 2 stocks highlighted above are just a fraction of what you get from our proven Income Stock Strategy.

That’s because each day our system recalibrates — and Zen Strategies members get access to the top 7 income stocks based on 115 different parameters that point to outperformance. 

See all Top 7 Income stocks here >

However, maybe none of the stocks you’ve seen here have caught your eye. Perhaps you would like to see all 11 of our market beating strategies including Growth, Momentum, Value, and our coveted AI Factor model. 

Each featuring the top 7 stocks.

Each featuring tremendous performance.

We spell it all out in this timely presentation below that lives up to its name:

77 Best Stocks Now! > 

What to Do Next?

• 77 Best Stocks NOW! >
• Options Trading with the Zen Ratings >
• 2 New Stocks to Buy from Steve Reitmeister >

Want to get in touch? Email us at news@wallstreetzen.com.