High-Dividend Stock Yields 9%, Just Won Major Contract, Estimates Rising

This stock yields over 9%, with strong coverage of 1.30x, and has major industry tailwinds. It just landed a major contract that will increase its EBITDA and distributable cash flow by over 35%. Analysts have raised earnings estimates and price targets over the past 30 days, but it's still 8% below analysts' lowest price target. With global warming heating up, many nations, especially in Europe, have passed much stricter guidelines for their power plants to drastically reduce their use of coal in the future, and replace it with cleaner, renewable fuels. These utilities are literally between "a lump of coal and a hard place," to paraphrase an old expression.

That's where Enviva Partners (NYSE:EVA) comes in - it's the biggest player in the wood pellets industry. EVA is based in the Southeastern US, which is the cheapest source for wood pellets. Due to the increased regulation in Europe, there's huge demand for its products. In fact, EVA just landed a major contract in the UK, which should increase its future tonnage volume, EBITDA, and distributable cash flow by around 35%. In addition to landing more contracts, EVA has another growth driver - like many of the LPs we cover, it also has first purchase options on a strong pipeline of drop-down assets from its sponsor/parent company.

Source: Seeking Alpha

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