The stock market is currently retracting amid president Trump's announcement last week that the US has yet to agree to halt tariffs on Chinese goods. Before Trump’s statement that initially sent stocks lower, optimism circulated throughout Wall Street on Friday as the US and China work to close out phase one of the trade deal.
Sentiment was also boosted last week by corporate earnings results that have generally beaten expectations. As equities look to continue their remarkable run but nothing has been set in stone regarding the trade war, dividend paying stocks may be a solid route to take as things progress.
Cracker Barrel CBRL has grown remarkably in its 50 years from a single Tennessee location to now boasting 660 locations, making it an industry giant. That size already puts the restaurant in the top ten largest casual dining chains, but its storied run in the industry makes it susceptible to fizzling out as it holds onto its traditional atmosphere. In a market where fast casual restaurants like Chipotle CMG and McDonald’s MCD dominate, Cracker Barrel is investing in businesses that cater to the contemporary consumer.
Cracker Barrel opened up its first new restaurant called Holler & Dash Biscuit House, which is a biscuit-centric fast casual chain. The small seven-unit concept has been well received and was even recognized by Nation's Restaurant News as a Hot Concept in 2018. Cracker Barrel pays out a quarterly dividend with a solid 3.18% yield and a beta ratio of 0.56 that can make it an anchoring asset to have if volatility plagues the equity market. Cracker Barrel sits at a Zacks Rank #2 (Buy).
Intel INTC is coming off a strong third quarter that sent its shares 8% higher in the aftermath of the report. Intel beat analyst and its own management’s estimates for both revenue and earnings in the third quarter, producing slight sales and adjusted earnings growth. Despite the increased competition, Intel raised its outlook for the full year. The company now expects to produce revenue of $71 billion and adjusted EPS of $4.60, up from previous guidance of $69.5 billion and $4.40, respectively.
Intel is currently trading at 12X its forward earnings, a discount relative to the industry average of 21X forward earnings. The stock’s current forward multiple gives investors a solid entry point into a company that has its sights set on the secular shift towards cloud computing. Intel CFO, Bob Swan, stated that the company expects to generate $85 billion in revenue and $6 per share in three to four years as the cloud computing market matures. Intel boasts a 2.17% dividend yield that has steadily increased over the past several years. Intel sits at a Zacks Rank #2 (Buy).
Innovative Industrial Properties IIPR is a REIT who has seen its shares soar over 87% in 2019 thus far, dwarfing the real estate market’s 20.3% YTD run. The cannabis REIT is coming off a strong quarterly report where its top and bottom lines skyrocketed Y/Y and sent its shares up over 8% as it captivated Wall Street. The company’s presence in the emerging legal marijuana market has excited investors; IIPR buys up land and facilities that'll be used for growing medical marijuana, then leases these properties out to pot growers for an extended period of time. With the US pot industry potentially reaching $100 billion in a decade, investors give a REIT like IIPR a long runway for its potential growth. When the year began, Innovative Industrial Properties owned just 11 properties. But as of the end of October, IIPR had 38 properties in its books in 13 states, including $403.3 million in invested capital.
Innovative Industrial Properties passes along a 3.25% annual rental increase to its tenants, which bodes well for the company as it continues to grow. The company boasts a dividend with a hefty 3.91% yield that can bolster shareholder’s return for years to come. Despite the recent headwinds that have impacted the marijuana industry, IIPR is a sound bet to make as the medicinal marijuana market emerges from the regulatory constraints. IIPR sits at a Zacks Rank #1 (Strong Buy).
5 Stocks Set to Double
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Click to get this free report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report McDonald's Corporation (MCD) : Free Stock Analysis Report Intel Corporation (INTC) : Free Stock Analysis Report Innovative Industrial Properties, Inc. (IIPR) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research