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The dual prospects of four Fed rate hikes this year and higher inflationary expectations thanks to a commodity market rebound (mainly crude oil) have sent shockwaves across the treasury market. The 10-year benchmark U.S. Treasury yield spiked to 3% on Apr 24 for the first time since January 2014.
The Fed enacted a 25-bp hike in March, and two more are likely in June and September. But the fed funds futures market lately signaled a 50% chance of one more move in December. Plus, the likelihood of new government debt issuances has played its role in pushing the yields higher.
In such a scenario, many will be cautious about their fixed income holdings with this prospect. But beyond that, stocks are also likely to face challenges on a gradual cease of cheap money inflows. After all, global stocks have attained heights amid ultra-easy monetary policy.
Time to Buy High Dividend Stocks?
Investors, who want to start preparing for an uptick in interest rates, may tap high dividend-paying stocks. After all, a high dividend provides investors avenues to make up for capital losses, if that happens at all.
Also, dividend investing calls for value investing. If a broad-based selloff hits the market in a rising yield environment, value stocks may come to investors’ protection. The looming trade tension (which has eased a lot in recent times though) is another reason for which investors may be in search of dividend-paying stocks that offer benchmark-beating yields.
Below we highlight five stocks that yield more than 3% annually.
The company is in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. It has a Zacks Rank #2 (Buy) and a VGM (Value, Growth, Momentum) Score of B. The stock hails from a top-ranked Zacks industry (top 43%).
Main Street Capital Corporation (MAIN - Free Report) – Yields 6.13%
The Zacks Rank #2 stock is a specialty investment company providing customized financing solutions to lower middle market companies that operate in diverse industry sectors. The stock comes from a top-ranked Zacks industry (top 38%) and has a VGM Score of B.
The company is one of the nation's premier retailers. The stock belongs to a top-ranked Zacks industry (top 1%). It sports a Zacks Rank #1 (Strong Buy) and has a Value Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company offers a portfolio of hard disc drives, solid state drives and solid-state hybrid drives. The stock belongs to a top-ranked Zacks industry (top 9%) and has a Zacks Rank #1. Moreover, it has a Value Score of A.
The Zacks Rank #2 company is a diversified power generation and utility company. It hails from a top-ranked Zacks industry (top 32%) and has a VGM Score of A.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Beat Benchmark Treasury Yield With 5 Top Stocks
The dual prospects of four Fed rate hikes this year and higher inflationary expectations thanks to a commodity market rebound (mainly crude oil) have sent shockwaves across the treasury market. The 10-year benchmark U.S. Treasury yield spiked to 3% on Apr 24 for the first time since January 2014.
The Fed enacted a 25-bp hike in March, and two more are likely in June and September. But the fed funds futures market lately signaled a 50% chance of one more move in December. Plus, the likelihood of new government debt issuances has played its role in pushing the yields higher.
In such a scenario, many will be cautious about their fixed income holdings with this prospect. But beyond that, stocks are also likely to face challenges on a gradual cease of cheap money inflows. After all, global stocks have attained heights amid ultra-easy monetary policy.
Time to Buy High Dividend Stocks?
Investors, who want to start preparing for an uptick in interest rates, may tap high dividend-paying stocks. After all, a high dividend provides investors avenues to make up for capital losses, if that happens at all.
Also, dividend investing calls for value investing. If a broad-based selloff hits the market in a rising yield environment, value stocks may come to investors’ protection. The looming trade tension (which has eased a lot in recent times though) is another reason for which investors may be in search of dividend-paying stocks that offer benchmark-beating yields.
Below we highlight five stocks that yield more than 3% annually.
Tecnoglass Inc. (TGLS - Free Report) – Yields 7.05%
The company is in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. It has a Zacks Rank #2 (Buy) and a VGM (Value, Growth, Momentum) Score of B. The stock hails from a top-ranked Zacks industry (top 43%).
Main Street Capital Corporation (MAIN - Free Report) – Yields 6.13%
The Zacks Rank #2 stock is a specialty investment company providing customized financing solutions to lower middle market companies that operate in diverse industry sectors. The stock comes from a top-ranked Zacks industry (top 38%) and has a VGM Score of B.
Macy's Inc. (M - Free Report) – Yields 4.96%
The company is one of the nation's premier retailers. The stock belongs to a top-ranked Zacks industry (top 1%). It sports a Zacks Rank #1 (Strong Buy) and has a Value Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Seagate Technology Plc (STX - Free Report) – Yields 4.33%
The company offers a portfolio of hard disc drives, solid state drives and solid-state hybrid drives. The stock belongs to a top-ranked Zacks industry (top 9%) and has a Zacks Rank #1. Moreover, it has a Value Score of A.
The AES Corporation (AES - Free Report) – Yields 4.38%
The Zacks Rank #2 company is a diversified power generation and utility company. It hails from a top-ranked Zacks industry (top 32%) and has a VGM Score of A.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>