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3 Top High-Yield Stocks to Sail Through Uncertainties in 2024
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One of the major things currently weighing on the stock market is the vagueness related to the Federal Reserve’s intention to trim interest rates this year. The Federal Open Market Committee’s minutes have shown that Fed officials are still undecided about when to cut interest rates and kept the possibility of rate hikes on the table if price pressures climb.
What’s worse, consumer prices did pick up lately. The Labor Department stated that the consumer price index (CPI) increased 0.3% month over month in December and was up 3.4% from a year ago. Both data came in higher than economists’ expectations. Thus, this increase in the price consumers pay for goods and services indicates that inflation persists in the U.S. economy and might compel the Fed to rethink its dovish outlook.
Federal Reserve governor Christopher Waller, known for his hawkish views, has said the central bank may trim rates this year, but the shift toward the dovish monetary policy stance shouldn’t be “rushed.” He also said that the chances of a rate cut in March are dependent on inflation data. Unfortunately, the heightened worries in the Middle East are leading to shipping disruptions through the Red Sea and may add to inflationary pressure.
It shouldn’t be overlooked that interest rate hikes don’t bode well for the economy as they curb consumer outlays and increase the cost of borrowing. Talking about the economy, a survey of the business situation in the New York region fell recently to its lowest level since the beginning of the coronavirus pandemic, a tell-tale sign that the broader economy is not out of the woods.
The business condition index that measures manufacturing activity in the New York region plummeted 29.2 points to negative 43.7 in January, it's second-lowest reading ever. In the past two-month period, the index has plunged 58.2 points due to a decline in new orders, raising doubts about the fundamental strength of the U.S. economy.
Earlier, the Leading Economic Index had dropped for the 20th month in a row in November, signifying a probable economic downturn.
But it’s not just the U.S. economy that’s in the doldrums, China’s economy is also taking a beating due to the mayhem in its real-estate sector and mounting local government debt. Hence, with things not looking up for the economy and the Fed’s dilemma over cutting interest rates, the stock market is subjected to bouts of volatility. Also, this year's presidential election could easily lead to market upheavals.
Hence, from an investment perspective, investors should place bets on dividend-paying stocks such as Manulife Financial Corp (MFC - Free Report) , CNA Financial (CNA - Free Report) and Darden Restaurants (DRI - Free Report) for a steady stream of income since their sound business model helps them to remain unperturbed toward market gyrations.
Manulife Financial is one of the dominant life insurers in Canada and is rapidly growing its operations in the United States. Manulife Financial has a dividend yield of 4.9%, while its five-year average dividend yield is 9.2%.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.8% over the past 90 days. MFC’s expected earnings growth rate for the next five-year period is 10%.
CNA Financial offers commercial P&C insurance products, mainly across the United States. CNA Financial has a dividend yield of nearly 4%, while its five-year average dividend yield is 4.4%.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.6% over the past 90 days. CNA’s expected earnings growth rate for the next five-year period is 5%.
Darden Restaurants is one of the largest casual dining restaurant operators worldwide. Darden Restaurants has a dividend yield of 3.3%, while its five-year average dividend yield is almost 15.9%.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.1% over the past 60 days. DRI’s expected earnings growth rate for the next five-year period is 8%.
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3 Top High-Yield Stocks to Sail Through Uncertainties in 2024
One of the major things currently weighing on the stock market is the vagueness related to the Federal Reserve’s intention to trim interest rates this year. The Federal Open Market Committee’s minutes have shown that Fed officials are still undecided about when to cut interest rates and kept the possibility of rate hikes on the table if price pressures climb.
What’s worse, consumer prices did pick up lately. The Labor Department stated that the consumer price index (CPI) increased 0.3% month over month in December and was up 3.4% from a year ago. Both data came in higher than economists’ expectations. Thus, this increase in the price consumers pay for goods and services indicates that inflation persists in the U.S. economy and might compel the Fed to rethink its dovish outlook.
Federal Reserve governor Christopher Waller, known for his hawkish views, has said the central bank may trim rates this year, but the shift toward the dovish monetary policy stance shouldn’t be “rushed.” He also said that the chances of a rate cut in March are dependent on inflation data. Unfortunately, the heightened worries in the Middle East are leading to shipping disruptions through the Red Sea and may add to inflationary pressure.
It shouldn’t be overlooked that interest rate hikes don’t bode well for the economy as they curb consumer outlays and increase the cost of borrowing. Talking about the economy, a survey of the business situation in the New York region fell recently to its lowest level since the beginning of the coronavirus pandemic, a tell-tale sign that the broader economy is not out of the woods.
The business condition index that measures manufacturing activity in the New York region plummeted 29.2 points to negative 43.7 in January, it's second-lowest reading ever. In the past two-month period, the index has plunged 58.2 points due to a decline in new orders, raising doubts about the fundamental strength of the U.S. economy.
Earlier, the Leading Economic Index had dropped for the 20th month in a row in November, signifying a probable economic downturn.
But it’s not just the U.S. economy that’s in the doldrums, China’s economy is also taking a beating due to the mayhem in its real-estate sector and mounting local government debt. Hence, with things not looking up for the economy and the Fed’s dilemma over cutting interest rates, the stock market is subjected to bouts of volatility. Also, this year's presidential election could easily lead to market upheavals.
Hence, from an investment perspective, investors should place bets on dividend-paying stocks such as Manulife Financial Corp (MFC - Free Report) , CNA Financial (CNA - Free Report) and Darden Restaurants (DRI - Free Report) for a steady stream of income since their sound business model helps them to remain unperturbed toward market gyrations.
These stocks have a Zacks Rank #2 (Buy) and provide high yields. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Manulife Financial is one of the dominant life insurers in Canada and is rapidly growing its operations in the United States. Manulife Financial has a dividend yield of 4.9%, while its five-year average dividend yield is 9.2%.
In the past 5-year period, MFC has increased its dividend 13 times, and its payout has advanced nearly 9.2%. Check Manulife Financial’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.8% over the past 90 days. MFC’s expected earnings growth rate for the next five-year period is 10%.
CNA Financial offers commercial P&C insurance products, mainly across the United States. CNA Financial has a dividend yield of nearly 4%, while its five-year average dividend yield is 4.4%.
In the past 5-year period, CNA has increased its dividend five times, and its payout has advanced nearly 4.4%. Check CNA Financial’s dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 2.6% over the past 90 days. CNA’s expected earnings growth rate for the next five-year period is 5%.
Darden Restaurants is one of the largest casual dining restaurant operators worldwide. Darden Restaurants has a dividend yield of 3.3%, while its five-year average dividend yield is almost 15.9%.
In the past 5-year period, DRI has increased its dividend six times, and its payout has advanced nearly 15.9%. Check Darden Restaurants’ dividend history here.
The Zacks Consensus Estimate for its current-year earnings has moved up 1.1% over the past 60 days. DRI’s expected earnings growth rate for the next five-year period is 8%.