Gilman Hill’s Harrington sees upside in these two “return to normal” stocks

The COVID-19 restrictions are easing, but there are still factors like tapering and rate hike that could weigh on the market in the upcoming months. Amidst the concern, Gilman Hill’s Jenny Harrington sees potential for upside in two stocks that could benefit from “return to normal”.

Harrington’s comments on CNBC’s “Worldwide Exchange”

Jenny’s first pick is Sabra Health Care Inc (NASDAQ: SBRA) – a California-based real estate investment trust that serves the healthcare industry.

Harrington quoted a 7.5% yield and expected earnings growth of 5.0% next year as reasons why she likes the stock that is currently exchanging hands at about 10 times FFO. On CNBC’s “Worldwide Exchange”, she said:

They are in the skilled nursing and transitional care space. So, as we return to normal and people aren’t afraid to go to nursing homes, it’ll be beneficial to their occupancy growth.

Sabra is now collecting 99.8% of its expected rents, the company disclosed in its investor update last week.

Why Harrington likes Magellan Midstream Partners

Amidst the climate debate, Harrington quoted oil at $75 a barrel to make a thesis that “we’re still totally dependent on oil and gas”. To that end, she sees potential for upside in Magellan Midstream Partners (NYSE: MMP).

Magellan has raised its dividend for twenty years straight. With a dividend yield of 8.9%, the stock is trading at 12 times earnings. In her interview, Harrington said:

The stock is up year-to-date but down 7.0% in the last three months. So, you’re not buying it at its peak. If you’re nervous about the market and you want to put some dividend flow in your pocket with a safe investment where you can count on the management to keep increasing that dividend, this one is a terrific pick.