4 best income stocks to buy in February
Major stock indexes have seen sharp price swings since the start of this year due to the potential for multiple interest rate hikes this year and rising geopolitical tensions between Ukraine and Russia. Given the increasing volatility in the markets, investing in stocks that provide a steady stream of income through dividend payments might be one of the safest strategies.
Recently released data from the Labor Department shows a 7.5% year-on-year increase in the consumer price index compared to the Dow Jones estimate of 7.2%. This marks the upper since February 1982. The possibility of the Fed becoming more aggressive fighting high inflation for several decades could lead to increased volatility in stock markets in the short term. According to Savita Subramanian, US head of equity and quantitative research at BofA Securities, “this will be a year where we will be shocked by the volatility.”
That’s why today we’re highlighting 4 stocks from our Top 10 Income screen, which is just one of the top 10 performing screens in our POWR Screens Service 10 (more on this below). In addition to providing a steady stream of income, Midland States Bancorp, Inc. (MSBI), Barloworld Limited (BRRAY), SunCoke Energy, Inc. (SXC) and BCB Bancorp, Inc. (BCBP) are well positioned to witness near-term price appreciation.
Midland States Bancorp, Inc. (MSBI)
MSBI is a diversified financial holding company. Its segments include Banking and Wealth Management. The banking sector offers a range of financial products and services to consumers and businesses, including commercial equipment leasing, letters of credit and others. Its wealth segment includes estate financial planning, consulting and administration of corporate pension plans, and retail brokerage services through a third-party broker.
On January 25, 2022, MSBI announced the execution of 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 , Ill. In addition, the Mokena branch will be acquired by MSBI. MSBI President and CEO Jeffrey G. Ludwig said, “This transaction will provide additional core deposits at attractive prices, while increasing our exposure to the faster growing markets of northern Illinois.
MSBI’s dividend payouts have grown at a CAGR of 7.7% over the past three years. Its four-year average dividend yield is 4.2% and its current dividend translates to a yield of 3.8%. It is scheduled 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 income rose 103.8% year-over-year to $25.41 million. Additionally, its Adjusted EPS came in at $1.12, representing a 107.4% year-over-year increase.
Analysts expect MSBI’s EPS for the quarter ending March 31, 2022 to rise 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 a strong outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.
It has an A rating for Momentum and a B rating for Value, Stability and Sentiment. Within the Midwest Regional Banks industry, it is ranked first out of 41 stocks. To see MSBI’s other ratings for growth and quality, Click here.
Barloworld Limited (BRRAY)
BRRAY operates as a processing, distribution and industrial services company based in Sandton, South Africa. The Company offers industrial equipment and services including business-to-business sales, earthmoving equipment maintenance, rebuilding and salvage, industrial services and power systems that enable various mining, construction and power supply.
BRRAY’s four-year average dividend yield is 5.2% and its current dividend translates into a yield of 3.8%.
BRRAY Group’s revenue for the year ended September 30, 2021 increased 8.3% year-on-year to R53.83 billion ($3.53 billion). The company’s revenue rose 22.5% year-on-year to R41.53 billion ($2.72 billion). In addition, its profit amounted to 2.80 billion rand ($0.18 billion), compared to a loss of 2.49 billion rand ($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 Rankings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an A rating for growth and a B rating for value, momentum and quality. It is ranked No. 2 out of 93 stocks in the B rating Industrial – Services industry. Click here to see BRRAY’s other ratings for Stability and Sentiment.
SunCoke Energy, Inc. (SXC)
SXC operates as an independent coke producer in the Americas and Brazil. The Company operates through Domestic Coke, Brazil Coke and Logistics segments. It offers metallurgical and thermal coal. It also provides handling and/or blending services to steel, coke, electric utilities, coal production and other manufacturing customers.
SXC’s four-year average dividend yield is 2.2%, and its current dividend translates to a yield of 3.1%. It is expected to pay a quarterly dividend of $0.06 per share on March 1, 2022.
SXC’s revenue 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. Additionally, its net profit was $12.70 million, compared to a net loss of $5 million a year ago.
For the quarter ending June 30, 2022, SXC 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, which equates to a Strong Buy in our proprietary rating system.
It has an A rating for growth and momentum and a B rating for value, sentiment and quality. It is ranked first out of 11 stocks in the A rating Coal industry. Click here to see SXC’s rating for stability.
BCB Bancorp, Inc. (BCBP)
BCBP provides corporate and personal banking products and services in the United States. The Company offers deposit products, including savings and club accounts, interest-bearing and non-interest-bearing current accounts, money market accounts, certificates of deposit and individual retirement accounts. It also offers commercial and multi-family real estate loans, family loans for one to four people, consumer loans and residential loans.
BCBP’s dividend payouts have grown at a CAGR of 3.4% over the past three years. Its four-year average dividend yield is 4.5% and its current dividend translates to a yield of 3.4%. It is scheduled to pay a quarterly dividend of $0.16 per share on February 15, 2022.
For the year ended Dec. 31, 2021, BCBP’s net income increased 64.2% year-over-year to $34.20 million. The company’s EPS was $1.92, representing a 68.4% year-over-year increase, while its EPS for the fourth quarter ending December 31, 2021 increased down 48.7% year-over-year to $0.61.
Analysts expect BCBP’s EPS and revenue for the quarter ending March 31, 2022 to rise 25% and 8.4% year-over-year to 0.50 and 26.32 million dollars, respectively. It has exceeded Street EPS estimates in each of the past 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 a strong outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.
It has an A rating for momentum, stability, and sentiment, and a B rating for value. It is ranked first out of 55 stocks in the B rating North-East Regional Banks industry. To view BCBP’s ratings 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, the MSBI has gained 20.37%, compared to a -7.86% rise in the benchmark S&P 500 over the same period.
About the Author: Dipanjan Banchur
Ever since he was in elementary school, Dipanjan had been interested in the stock market. This allowed him to obtain a master’s degree in finance and accounting. Currently, as an investment analyst and financial journalist, Dipanjan is particularly interested in reading and analyzing emerging trends in financial markets. Following…