Top Holiday Picks: These 2 Dividend Stocks You Don't Want to Miss
Two dividend stocks stand out for yield-focused investors this Black Friday: BSR Real Estate Investment Trust (BSRTF) and Hess Midstream LP (HESM). BSRTF offers a 5% yield and trades below net asset value, while HESM provides a yield above 9% with stable revenue from minimum volume commitment contracts. Both stocks carry risks related to market concentration and regional dependencies.
This article first appeared on GuruFocus.
Two dividend plays stand out this Black Friday for yield-focused investors: a Sunbelt multifamily REIT trading at a deep discount and a midstream business offering a double-digit payout.
BSR Real Estate Investment Trust (BSRTF) focuses on multifamily properties in the Texas Triangle, Dallas, Austin and Houston. Management has shifted the portfolio toward newer properties after selling older assets, and the company now pays monthly distributions that work out to about a 5% yield. The REIT trades well below net asset value, which could offer upside if rent growth normalizes as recent lease spreads stabilize.
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Hess Midstream LP (NYSE:HESM) offers a yield north of 9% and issues 1099 tax forms, making it potentially suitable for retirement accounts. HESM's cash flows rest on minimum volume commitment contracts, which help stabilize revenue. The unit saw some overhang when activist and strategic stakes shifted, but Chevron's (NYSE:CVX) acquisition of Hess refreshed investor confidence and reduced structural uncertainty.
Both names carry risks. BSRTF still faces local oversupply and concentration in Texas markets, which could pressure near-term occupancy and rents. HESM depends heavily on one region and a single major counterparty, though recent ratings and management buybacks have reduced some balance-sheet worries.
To the income-seeking type, these ticker picks are high dividends mixed with their own easy narratives: one is an estates re-discovery play in the booming Sunbelt, and the other a cash machine in the midstream courtesy of a strong parent company. Before the market is through valuing the opportunities, you will want to check out the payout support, the concentration of the region, and the likelihood that dividends and share prices continue to reverse before they can do the valuing.
