Since bottoming last October, the S&P 500 Index has rebounded strongly from the bottom - in fact, it has risen approximately 25%. A rally of this magnitude meets the definition of a bull market, and some economists argue that we are experiencing just such a market.

But investment firm Wells Fargo comes with a warning. In a recent warning to investors, investment strategies analyst Austin Pickle warns that a recession is likely in the near future, saying, "At full valuations of stocks, we believe prices are unlikely to sustain recent highs as the economy rolls over."

Pickle goes on to list three factors that are likely to push markets lower in 2H23 or 1H24. First, the analyst notes that the Fed is still locked into raising interest rates. Although the inflation rate is falling, it is almost certain that the Fed will make another 0.25% hike this month, taking rates to their highest level since 2007. Second, the economy has not yet fallen into recession. Historically, stocks tend to bottom after a recession hits - and after the Fed starts cutting rates in response. Finally, the current rally is not healthy. It is primarily driven by a small group of technology stocks, which is too narrow a base to support a major rally.

It's a mindset that naturally turns us to dividend stocks. These are traditional defensive investment plays that offer stable payouts to shareholders that guarantee an income stream regardless of whether markets rise or fall.

Against this backdrop, some Wall Street analysts have given a thumbs-up to two dividend stocks with yields of no less than 8%. We opened our database and examined the details of these two stocks to see what else makes them attractive buys.

OneMain Holdings $OMF

We'll start in the financial services sector with OneMain. This online banking and finance company focuses on consumer services in the subprime banking and lending market. OneMain offers a wide range of financial services, particularly personal loans and insurance products, to a consumer clientele that sometimes does not have access to the traditional banking system. OneMain uses a rigorous screening system for its customers and prides itself on its screening process to keep default rates at acceptable levels. In addition to its online presence, OneMain also reaches customers through its network of physical branches, of which there are approximately 1,400 in 44 states.

On the financial side, OneMain reported its 1Q23 results in late April, which showed somewhat mixed results. Top-line revenue was $1.03 billion; this was in line with expectations, unchanged year-over-year, and only narrowly missed forecasts, coming in $2.6 million below expectations. The company's bottom line showed volatility. Non-GAAP earnings per share were $1.46, missing estimates by 19 cents, while GAAP earnings per share of $1.48 were 5 cents better than estimates.

OneMain had $18.5 billion in outstanding debt and $544 million in cash and liquid assets at the end of the first quarter. Of that total cash, $177 million was not available for general corporate purposes. The company has $385 million set aside as an allowance for losses on finance receivables. While this amount is lower than the equivalent provision in the last three quarters, it is significantly higher than the $238 million set aside for this purpose at the end of 1Q22.

Turning to the dividend, we find that OneMain declared its last payout on April 25 of this year, at $1 per share. The dividend amounts to USD4 annually and provides a strong yield of 8.6%.

This consumer lending company has caught the attention of five-star JMP analyst David Scharf, who sees an overall favorable risk/reward ratio here. Scharf notes that OneMain is outperforming its competition in customer applications and maintaining discipline on costs.

"We continue to be encouraged by the improving credit profile that emerged after tightening in mid-2022, increased application volume and share gains due to weakening competition, maintaining cost discipline, increased capital generation and an improving funding profile. We continue to believe that the company's 2023 outlook is somewhat conservative, both in terms of loan loss reserves and portfolio growth, and after just one quarter, we have already seen an increase in our target for claims growth at the high end of the range," Scharf opined.

"When the above positive attributes are combined with a current year discounted P/E below 6x and a dividend yield above 10%, we see a very compelling risk/reward trade-off for OMF stock," the analyst summarized.

Looking ahead, Scharf gives OneMain stock an Outperform (i.e. Buy) rating and its $55 price target implies a one-year upside potential of 18%. Based on the current dividend yield and expected price growth, the stock has a ~27% potential total return profile.

Overall, OneMain earns a Strong Buy rating from the Street based on 12 recent analyst ratings, which include 9 Buys and 3 Holds.

Global Medical REIT $GMRE

Another stock on our list is a real estate investment trust, REIT. These are longtime dividend champions, and Global Medical brings an interesting twist to the REIT model: the company focuses on medical equipment and real estate. The company boasts an extensive background that includes 188 owned buildings with 4.9 million rentable square feet and 274 tenants. Global Medical's real estate is valued at approximately $1.5 billion and the company collects annual base rent of $114.9 million.

In the past few quarters, the company has seen revenue growth while earnings per share have been sliding down. This is evident in the company's latest quarterly financial report from 1Q23. GMRE reported top-line earnings of $36.2 million, up more than 13% from the previous quarter, but slipped just short of guidance by $340,000. The company's result, a net profit of $700,000 attributable to common shareholders, produced earnings per share of 1 cent. This was in line with the forecast, but down sharply from the 4 cents per share reported in 1Q22.

Dividend-oriented investors should monitor the company's funds from operations, or FFO, as this metric reflects available cash. Global Medical reported FFO of $15.1 million, or 22 cents per share, and adjusted FFO, or AFFO, of $16 million, or 23 cents per share, for the first quarter. As of March 31 of this year, the company had $4.6 million in cash and cash equivalents, compared to $4.02 million at the end of 2022.

On June 9, the company declared a common stock dividend of 21 cents per share and paid it on July 11. The dividend is 84 cents annually and yields a solid 8.6%. The company has paid a dividend of 21 cents for 6 quarters and has paid a slowly growing dividend since 2016.

Five-star analyst Stephen Manaker, who covers this stock for Stifel, sees a lot of potential for investors to grab onto. He writes, "We rate GMRE a Buy because we believe the stock represents attractive value, despite limited near-term growth and above-average leverage. We still view the REIT as a long-term growth story that buys assets in secondary markets, markets that larger institutional investors typically avoid. While the tenants may not have investment grade ratings, GMRE's focus on tenant profitability in a particular location (among other underwriting criteria) has worked well.

"The REIT should be able to sell some of these assets with proven tenants, allowing capital to be recycled into more profitable investments. This could help REITs increase earnings without necessarily increasing balance sheet size or access to expensive capital," the analyst added.

In addition to the Buy rating, Manaker gives GMRE stock a target price of $11, implying a 13% upside over the next 12 months.

Overall, GMRE earns a Moderate Buy rating from a consensus of analysts based on 7 recent ratings. These are divided into 4 Buys and 3 Holds.