Three Stocks to Watch for the Week of June 20th, 2021

The Fed remains a focal point in the week ahead with Chair J. Powell set to speak Tuesday before the House Select Subcommittee on the Coronavirus Crisis on the central bank’s policy response and the economy.  Investors will also be turned in on Friday for more crucial data on personal consumption expenditures, including the PCE inflation index, which is watched closely by the Fed.  Markets seem to be still working through the results of last week’s FOMC meeting which were announced Wednesday and may be sensitive to new information.      

“Investors may be interpreting the Fed’s hawkish tilt Wednesday as a sign that an extended US post-pandemic economic expansion may be a bit harder to achieve in a potentially emerging environment of less accommodative monetary policy,” said Goldman Sachs’ Chris Hussey.

There seems to be no consensus on the overall direction the markets should be heading this week.  The number of upgrades and downgrades were about equal last week and most indicators have moved away from bearish extremes.  But a fair bit of discrepancy exists among them.  With more pertinent Fed data being served, markets will have a lot to digest.  Which means a continuation of wild swings in both directions could be in store for the week ahead. 

With current conditions in mind, our team has singled out three stocks to watch as we kick off the summer and move into the second half of the year.  Continue reading to find out who we’ve got our eyes on this week.

As many of the world’s economies resume their manufacturing and industrial activities, the shipping industry has been slowly recovering thanks to rising demand for commodities and increasing international trade.  As a result, container ship chartering company Costamare (CMRE) is witnessing increasing demand for their services. 

 As of June 2021, Costamare reported contracted revenue of $3 billion, providing clear revenue and cash flow visibility. The company has been beefing up its fleet in anticipation of growing demand.  Since the beginning of 2021, the company has acquired 17 vessels.  Considering its strong balance sheet, the company seems positioned for further expansion.  And with continued global progress on the coronavirus vaccination front, growth in demand is expected to continue.  According to Globe Newswire the global dry bulk shipping market is expected to grow at a 5.10% CAGR between 2020 – 2027. 

Small-cap CMRE is among the top value stocks, trading at a forward P/E of just 5.3.  But what makes an investment in CMRE stock even more appealing is the 3.57% dividend yield which the company has paid 42 out of 42 consecutive quarters since their debut on the public markets in 2010.  A clear demonstration of the businesses resilience through economic cycles.  As day-rate improves and cash flow accelerates, higher dividends are likely in the coming quarters. 

Year-to-date, CMRE has outperformed the S&P 500 with a gain of 48.28% versus a 13.56% rise for the benchmark index.  Costamare is well positioned for a continued strong performance through the second half of the year.  

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Rapidly declining installation costs and increasing demand across the public and private sector could send solar stocks on an upward path for years to come.  By 2026, the global solar industry is projected to be worth $223.3 billion.  

The Invesco Solar ETF (TAN) is a great way to gain exposure to solar without investing in just one stock.  The fund seeks to track the MAC Global Solar Energy Index and is comprised of about 35 individual components — including both U.S. and international stocks.  The fund follows a blended strategy, investing in both value and growth stocks with various market caps.  

TAN share price reached its peak in mid-February and has fallen since.  However, it could be an excellent opportunity to get in at a more attractive price as growth in the solar industry will likely gain strength in the long term.

ETFs, by their nature, are often considered a less risky investment as they tend to be much less volatile than individual stocks.  If you’re unsure about which solar stocks to buy, and if you want to cut back on potential risk, TAN is a relatively safe way to add solar energy to your investment portfolio.    

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STAG Industrial, Inc. (STAG) is a real estate investment trust focused on acquisition and operation of single-tenant, industrial properties throughout  the U.S..  The company currently owns 494 properties with 99.1 million square feet of space.  

STAG is active across all aspects of the industrial real estate market, including owning light manufacturing properties and flex/office space.  Because these properties are essential to their tenants, STAG was able to collect nearly all the rent billed last year.  Flex/office space is a market estimated at $1 trillion of properties in the U.S. alone.  With just 0.5% share of that market, STAG has plenty of room to grow.  

STAG’s portfolio is continually expanding through acquisition.  It will often purchase value-add properties and leverage its substantial leasing and redevelopment experience to increase shareholder value  Over the next five years, it plans to spend $800 million to $1.2 billion on property purchases.   

Thanks to this acquisition strategy, the company’s payout has been slowly but steadily increasing. Given the REIT’s aim to invest billions in expanding its portfolio over the next five years, that trend should continue.   The stock sports a hefty, 4% yield, which is paid out monthly, making it even more attractive to income-seeking investors.  

STAG has developed an investment strategy that helps investors find a powerful balance of income plus growth.  That income with upside makes them a great high-yield REIT to consider adding to your portfolio.  

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