They may not be widely discussed as other, more popular dividend stocks, but they offer compelling yields and a good deal of upside potential.
Plus, it never hurts to hold dividend stocks – especially when markets get uncontrollably volatile. Not only can they help protect your portfolio, but they can help generate healthy passive income along the way.
That being said, here are three overlooked dividend stocks you may want to consider.
American States Water
With a yield of 2.32%, Dividend King, American States Water (NYSE: AWR) provides water and electric services with a strong history of consistent dividend increases. In fact, it’s paid out a dividend every year since 19321.
Earlier this month, AWR approved a quarterly dividend of $0.4655 per share – its 356th consecutive dividend – which is payable on June 3 to shareholders of record as of May 19. Even better, it just blew earnings out of the water.
In its first quarter, EPS of 70 cents beat by three cents. Revenue of $148.01 million, up 9.4% year over year, beat by $2.16 million. Plus, analysts at Wells Fargo just upgraded AWR to an equal weight rating with a price target of $84.
Last trading at $80.24, we’d like to see AWR retest $86 initially.
Technical exits refer to points on a chart where the trader would exit the trade regardless of profit and loss on the options. Once the stock has reached either the bullish or bearish target it would be wise to close the trade – win, loss or draw. As you develop your skill sets in the marketplace you may find that the movement towards the projected target sets up for a continued trend, or the reversal of the trend. This would indicate the trade should be adjusted at this point to reflect the new information on the stock.
Profit and Loss Exits
Profit and loss exits refer to the actual value of the options. It is always wise and recommended to set a loss target on a trade. This is simply the value of the position the trader is willing to lose before they exit. Most often this is calculated using a percentage value. For example, say a trader bought a Strangle for $4.00 and they are willing to lose 50%. When creating their trade plan they would put in that they will close the position at a loss if the value of the Strangle was to dwindle down to $2.00. It would be smart to not only put the percentage value you are willing to lose, but the actual dollar value as well. This saves the trader from having to do the math each day to calculate what the dollar value of the 50% would be. It is suggested that the loss exit be somewhere in the range of 30% - 50% the value that was paid for the Strangle trade.
Profit targets work the same as the trade makes money. Some traders would be happy to take 50% - 70% profit on the trade even if it had not reached the projected move, while that is not our recommendation here; there is nothing wrong with doing so.
The first profit opportunity we will review is a stock purchase in SSRM, or SSR Mining Inc. SSRM is focused on the operation, development, exploration and acquisition of precious metal projects.
The monthly chart shows that SSRM closed above the 10-period or 10-month simple moving average line and triggered the current buy signal last October. At that time, SSRM was trading at 6.17. The current price is 10.78. The next targets are 12.50 and 15.
The daily chart shows that SSRM was mostly trading inside the Upper Keltner Channel or higher from early December until late March. That’s an excellent sign of strength. This month’s pause gives us a buying opportunity.
We recommend buying SSRM stock at the current price level.
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