Traders are all the time searching for excessive returns, and proper now the indicators are lining up in favor of the high-yield dividend phase. Dividend funds guarantee an everyday earnings stream, no matter market situations, whereas excessive yields supply the potential for stable returns on funding.The dividend shares are additionally favorites of defensive traders, tending to be much less risky throughout market ups and downs. That’s an essential level proper now – although the consensus knowledge is suggesting that we’ll see an financial mushy touchdown, there’s nonetheless an opportunity of an financial downturn.This background has knowledgeable a current observe from Desh Peramunetilleke, head of Microstrategy at funding financial institution Jefferies, who factors towards high-yield dividend shares as sound selections given right now’s situations.“After a difficult 2023,” the Jefferies crew says, “the outlook for dividend methods has improved. Fed is more and more leaning in the direction of June being the primary minimize, indicating that development will change into an even bigger problem than inflation. Nevertheless, given {that a} hard-landing is unlikely, ultra-defensive bond-proxies may proceed to wrestle. As an alternative, we discover high-quality yield as best-placed to seize the cycle.”Jefferies’ Omar Nokta, a 5-star analyst rated within the high 4% of the Avenue’s inventory professionals, has adopted this line of thought with a number of particular picks – tagging 2 high-yielding dividend shares as buys, selections that ought to return as much as 8% dividend yield. We’ve used the TipRanks database to get the broader view of those shares, and located that they’ve earned Sturdy Purchase consensus scores. Listed below are the detailsDHT Holdings (DHT)We’ll begin with a tanker firm, DHT Holdings. This agency is likely one of the impartial operators within the international oceanic transport sector, specializing within the carriage of crude oil. DHT’s title is the acronym for ‘double hull tankers,’ a contemporary mode of tanker building designed to advertise security and forestall leaks. The corporate is a pure-play operator of VLCC’s, or ‘very giant crude carriers,’ huge tankers with rated within the vary of 299,000 to 320,000 dry weight tonnage (DWT). These are the biggest of the crude tankers plying the oceans right now.Story continuesDHT’s fleet of 28 VLCCs is wholly owned by the corporate and operated totally on a constitution foundation. The prevalence of long-term constitution contracts within the firm’s operations mannequin provides DHT a excessive stage of dependable fastened earnings.Fleet high quality is a crucial issue for oceanic tanker corporations, and DHT has a comparatively younger fleet. All however 4 of its vessels had been in-built 2011 or later, with the 5 youngest vessels afloat having been in-built 2018. The corporate’s fleet contains a complete of 28 VLCCs, together with 4 tankers for which the corporate has just lately entered into constructing agreements. These 4 vessels are to be constructed at South Korean shipyards and can gross 320,000 DWT every. Every ship has a median value of $128,500,000 and shall be delivered in 2026.In its final quarterly monetary outcomes, from 4Q23, DHT reported a complete of $94.5 million in adjusted web revenues, a complete that was down 19% year-over-year however was $1 million higher than had been anticipated. The corporate’s EPS, by GAAP measures, got here to 22 cents per share. This was 1 cent above the forecast – and it absolutely lined the corporate’s most up-to-date dividend declaration.The dividend, amounting to 22 cents per frequent share, was declared together with the This autumn outcomes. This dividend cost represented a 15.7% improve from the earlier cost and was despatched out to frequent shareholders on February 28. The annualized cost of $0.88 per frequent share yields an 8% return.Jefferies analyst Omar Nokta is impressed by the standard of DHT’s ships and operations, writing: “DHT is a pure-play VLCC shipowner with publicity to the spot market, with its eco-design and scrubber-equipped vessels positioned for outsized earnings potential. We see stronger dynamics forward for tankers, particularly with rising non-OPEC manufacturing volumes and the potential for extra OPEC+ exports. We count on shareholders to profit from its dividend payout ratio of 100% of quarterly earnings.”Taking this ahead, Nokta provides DHT a score of Purchase, an improve from Maintain, and a value goal of $14 that factors towards a one-year upside potential of ~26%. (To observe Nokta’s observe document, click on right here)General, this inventory’s Sturdy Purchase consensus score is predicated on 4 current analyst evaluations, that break down to three Buys and 1 Maintain. The shares are buying and selling for $11.15, and the $13.43 common goal value implies the shares will acquire ~20% within the subsequent 12 months. (See DHT inventory forecast)Frontline (FRO)The subsequent inventory on Jefferies’ record is Frontline, one of many world’s largest tanker corporations. Frontline carries each crude oil and refined merchandise and operates one of many trade’s largest and most trendy fleets. The corporate has 86 vessels afloat, with the oldest in-built 2009 and 20 in-built 2020 or later. The fleet consists of 43 VLCCs, the biggest class of ocean-going tanker, and in addition consists of 25 Suezmax vessels, rated at 157,000 DWT and the biggest that may transit the Suez canal, in addition to 18 LR2/Aframax tankers, rated at 110,000 DWT.Frontline has been in operation since 1985 and has seen stable successes in current quarters. Revenues had been up final yr in comparison with the prior yr, rising 27% from $1.44 billion in 2022 to $1.83 billion in 2023. The corporate’s inventory additionally noticed robust good points, greater than 60% within the final 12 months and practically 17% for the year-to-date.With the fourth quarter of 2023 behind us, we are able to take a look at Frontline’s income for that quarter. The corporate had $415 million on the high line, down 21% year-over-year and greater than $5 million under the forecast. On a greater observe, the corporate’s adjusted revenue for the quarter, at $102.2 million, got here to 46 cents per share.This was greater than sufficient to cowl the common share dividend, which was declared on February 28 for a cost on March 27, at a price of 37 cents per share. This declaration represents a 23% improve from the earlier quarter, and the annualized dividend, of $1.48, provides a yield of 6.4%. Frontline has a historical past of adjusting its dividend cost to maintain it consistent with present earnings.In his protection for Jefferies, analyst Nokta is impressed by the corporate’s skill to persistently preserve a excessive dividend payout ratio. He says of the inventory, “Frontline is likely one of the largest crude tanker operators on the planet with a younger fleet and excessive scrubber publicity. We see stronger dynamics forward for tankers, particularly with rising non-OPEC manufacturing volumes and the potential for extra OPEC+ exports. We count on dividends to stay a central a part of the Frontline story and count on shareholders to profit from its unofficial dividend payout ratio of 80% of quarterly earnings.”Wanting forward, Nokta provides this inventory, like DHT above, an upgraded score, from Maintain to Purchase. His value goal right here, set at $30, suggests a possible one-year upside of 30%.All in all, Frontline has 5 current analyst evaluations, together with 4 Buys to 1 Maintain, for a Sturdy Purchase consensus score from the Avenue’s analysts. The inventory’s common goal value of $28.61 and its present buying and selling value of $23.04 collectively indicate a one-year acquire of 24%. (See FRO inventory forecast)To search out good concepts for dividend shares buying and selling at engaging valuations, go to TipRanks’ Greatest Shares to Purchase, a device that unites all of TipRanks’ fairness insights.Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is vitally essential to do your personal evaluation earlier than making any funding.