The company’s focus on increasing its data center services for enterprise will generate an estimated free cash flow of $842.4 million this year against $716.5 million last year. And the CAF2 subsidy will not raise the company’s capex for another year, meaning good distribution for its shareholders. The estimated dividend payout ratio for this year is 70% and will be 73% next year.
New strategies and growth for Opportunity Fund VIIb
Oaktree Capital Group LLC (NYSE:OAK) generally looks for distressed opportunities to invest in, but the current improving economic trends aren’t leaving it many places to look. As a result, the company is diversifying its business into areas such as strategic credit, real estate debt, emerging market debt, and enhanced income. Oaktree Capital Group LLC (NYSE:OAK) hopes to raise $5 billion in capital from these new strategies, and to replace the absence of revenue from distressed opportunities. Through these, assets under management will rise from $66.78 billion last year to $74.51 billion this year.
Oaktree Capital Group LLC (NYSE:OAK) announced the distribution of $1.4 billion as returns for its Opportunity Fund VIIb, a distressed debt fund, in May of 2013. This fund is expected to generate $178 million in net incentive income and $20 million in investment income in the quarter ending in July of this year. Oaktree Capital Group LLC (NYSE:OAK) estimates its total gross incentive income of $2.3 billion, to which Opportunity VIIb will contribute around 46% this year. This incentive income will help it to enhance distribution to shareholders with an estimated dividend yield of 9% this year.
Natural Resource Partners LP (NYSE:NRP) diversification to trona ore and the Illinois Basin provides prospects for NRP’s long-term growth. This diversification will help to offset weakness of Central Appalachia coal operation.
Windstream Corporation (NASDAQ:WIN)’s investment in a new data center will drive its business services revenue while its government-subsidized upgrades to existing rural broadband capacity will enhance consumer revenue.
Oaktree Capital Group LLC (NYSE:OAK)’s new strategies around Opportunity Fund VIIb will drive its earnings higher.
All three of these stocks are a “buy.”
The article 3 High-Dividend Companies to Buy originally appeared on Fool.com and is written by Madhu Dube.
Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends Oaktree Capital. The Motley Fool owns shares of Oaktree Capital. Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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