Analysts Just Cut Price Targets on These Two Dividend Stocks

Analysts have just reduced the price targets of these two dividend stocks: is it time to consider an alternative option?

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Dividend investors are always looking for companies with strong, consistent payouts. However, recent analyst actions suggest that two popular dividend stocks, Huntington Bancshares Incorporated (NASDAQ: HBAN) and Oxford Industries, Inc. (NYSE:OXM), could face headwinds. Let’s take a closer look at these companies and explore why income investors might want to consider alternative options.

Huntington Bank Shares

Huntington Bancshares Incorporated operates as the holding company of Huntington National Bank. The company offers a wide range of financial products and services, including deposits, loans and wealth management. Huntington Bancshares has a forward dividend yield of 5.02% and a payout ratio of 49.21%. However, the company has only offered modest dividend increases in recent years, with a five-year dividend growth rate (CAGR) of just 3.19%.

On June 14, 2024, Piper Sandler downgraded Huntington Bancshares from “Neutral” to “Underweight” and lowered its price target from $13.50 to $11.50. This implies a potential downside of 5.66% from the current price of $12.19.

Huntington Bancshares’ recent Q1 2024 earnings release showed mixed results. While the company reported growth in deposits and loans, net interest income decreased 9% year-over-year and non-interest income decreased compared to the previous quarter, excluding the impact of the mark-to-market valuation of fixed remuneration swaptions.

Oxford Industries

Oxford Industries, Inc. is an apparel company that designs, sources, markets and distributes products under various lifestyle brands, including Tommy Bahama, Lilly Pulitzer and Johnny Was. The company has a forward dividend yield of 2.63% and has increased its dividend for three consecutive years, with a five-year dividend growth rate (CAGR) of 13.52%.

On June 13, 2024, Citigroup maintained its “Sell” rating on Oxford Industries but lowered its price target from $94 to $92. This suggests a potential downside of 8.09% from the current price of $100.10.

Oxford Industries’ first quarter 2024 earnings release showed a 5.2% decline in net sales compared to the prior year quarter. The company also saw declines in gross margins and operating profit as it continues to invest in the business amid a challenging macroeconomic environment.

Is it time to opt for an alternative option?

Given the uncertain outlook for these two dividend stocks and the stock market as a whole, income investors may want to explore alternative options offering higher yields and more stable returns. One such option is EquityMultiple’s Ascent Income Fund.

THE Ascent Income Fund of EquityMultiple focuses on private credit investments, targeting stable income from senior commercial real estate debt positions. With a historic distribution yield of 12.1% and a focus on capital preservation, this fund offers investors an attractive alternative to traditional dividend stocks.

The Ascent Income Fund aims to enhance investor security by investing in loans with priority of full repayment. The fund also offers flexible liquidity, with redemption options available one year after the initial investment. Learn more about the Ascent Income Fund on the EquityMultiple website.

Although Huntington Bancshares and Oxford Industries stocks have been popular picks among dividend investors, recent analyst actions and mixed results suggest these stocks may face near-term challenges. Investors looking for higher yields and more stable returns could consider alternative options such as the Ascent Income Fund, which offers the potential for attractive income backed by real assets. As always, investors should do their due diligence and consider their individual financial goals and risk tolerance before making any investment decisions.

Do you want to explore other high-yield investment opportunities? Check out Benzinga’s favorite alternative income investments here.

This article Analysts Just Cut Price Targets on These Two Dividend Stocks: Is It Time to Consider an Alternative Option? originally appeared on Benzinga.com