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(Bloomberg) — Saudi Arabia showed its determination to protect the oil recovery, warning short sellers not to challenge its resolve and delivering a rare…

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From the end of March through the end of August, stocks had a tremendous runup to record high levels. The gains completely wiped out the losses from the mid-winter ‘coronavirus collapse,’ and it looked like we were in for a sustained run of good days. But all of that changed as September rang in. The market hit a bump, and has been undergoing a correction. The Nasdaq is down nearly 7%, and volatility has been high so far this month.A new report from Canaccord’s Tony Dwyer puts the situation into perspective by pointing out the major source of uncertainty: “In a true statement of the obvious,” he writes, “this is the most complicated election-year setup we could possibly have.” He goes on to note the four most important ‘unknown’ factors: how the voting will actually happen this year, and avoiding vote fraud; who will win the White House; if the Democrats will sweep the Federal level elections; and, if the loser will concede the contest without a dragged-out legal battle. These are points giving investors ulcers at night.Dwyer balances all of that with the predictable factor: “Unlike the political backdrop, which is totally unpredictable, we know the Fed intends to keep rates at zero and to keep intervening when there are any signs of stress.” An active central bank will continue injecting liquidity into the system, which will be bullish for stocks. In Dwyer’s view, the only question is, what tools will the Fed use?So, in a situation that recalls Donald Rumsfeld’s ‘unknown unknowns,’ many investors are gravitating toward defensive stocks, taking steps to ensure a steady income stream. And this brings them, quite naturally, to dividend stocks. These traditional defensive plays may not offer the high share appreciation that is so attractive in normal times, but their high-yielding dividends make up for that when things turn sideways.With this in mind, analysts from JMP Securities have tapped three such defensive stocks, with dividend yields range from 8.5% to more than 12%. We’ve run the three through the TipRanks database to find out what makes them so compelling. Here are the results. BlackRock TCP Capital (TCPC)The first stock on our list is a financial company. BlackRock TCP Capital is a specialty finance company with a clear focus on mid-market lending. Since 1999, BlackRock has worked on originating and investing in debt securities, and has made a total of $20.1 billion in financing loans to more than 500 companies over the years. A plurality (over 34%) of the company’s investments are in the software and financial services fields, but BlackRock’s portfolio, current valued at $1.6 billion, spans a diverse field of targets.The company’s investments are profitable; as of the end of Q2 this year, the average annual return was 9.8%. That income provides earnings that regularly beat the forecasts. As the recessionary pressures began to ease, Q2 earnings came in at 36 cents per share, or 20% higher than expected.BlackRock uses these earnings to fund its dividend, which has been paid out regularly for more than 3 years. In a nod to the coronavirus crisis, the payment was cut from 36 cents to 30 cents – but at that level, BlackRock returns almost all of its earnings to company shareholders. The dividend yield is 12.1%, more than 6x higher than the average yield found among S&P listed companies – and more than 12x higher than the yield on US Treasury bonds in these days of near-zero interest rates. JMP analyst Christopher York is cautiously bullish on TCPC, and one of the reasons he cites is the company’s solid cash position.”The company has cash of ~$20.6mln and ~$328mln in availability on revolvers, which is more than enough to support any draw of unfunded commitments of $46.0mln. We think the liquidity at the company is very strong and think the resources at the advisor are superior to many BDCs, which we expect to lead to good longer-term restructuring and recovery outcomes,” York noted. York rates this stock an Outperform (i.e. Buy) and his $11 price target implies room for 13% share price growth in the coming year. (To watch York’s track record, click here)Overall, the analyst consensus rating here is a Moderate Buy, based on 3 Buys and 2 Holds. Shares are selling for $9.76 and the average price target matches York’s, at $11. (See BlackRock stock analysis on TipRanks)PennyMac Mortgage (PMT)Next up is another financial stock,…

Salma El Wardany, Javier Blas, Grant Smith and Dina Khrennikova

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