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Buy 4 Top Stocks Yielding 4% Plus to Beat Rising Rate Fears
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Global investors are struck with increasing inflationary and rising rate fears to start 2018. The benchmark U.S. Treasury bond yield spurted to 2.88% on Feb 23, 2018 from 2.46% seen at the start of the year. It now seems to be a matter of a time when we’ll see a 3% plus 10-year U.S. treasury yield.
An analyst said on CNBC that "we didn't pierce 3 percent this time, but the next 10-Year auction in a couple of weeks is probably certain to do that." With benchmark bond yields hovering around a four-year high, the bond market is believed to be ruling the stock market’s future movements.
And further higher yield could lead stocks to come crashing down. Goldman Sachs already forecast that stocks may nosedive 25% if 10-year bond yields hit a high of 4.5% and sees a more than 95% probability of a Fed rate hike in March.
A senior portfolio manager at Sit predicts that the Fed will raise rates four times this year, one more than that have so far been penciled by the central bank. Fears of faster ceases in cheap money inflows will likely hurt stocks.
On the other hand, the U.S. government needs to borrow around $955 billion in 2018 and more than $1 trillion in the next two years. And this need for borrowing comes at a time when interest rates are on an uptrend. All these actions should result in pushing up yields even higher.
Against this scenario, edgy investors might be dumping almost all of their holdings, be it bonds and stocks. However, one thing that investors can do is search for dividend stocks that offer benchmark-beating yields.
After all, such stocks provide investors avenues to make up for capital losses, if that happens at all. Also, dividend investing calls for value investing. Since in its northbound journey, stock valuation got elevated, a value quotient will boost investors’ portfolio at the current level.
Stock Picks
In this vein, below we highlight four top-ranked stocks which have a Zacks Rank #1 (Strong Buy) and a Value Score of A. Plus, these stocks offer a 4%-plus yield.
It is a retailer of medium to better-priced casual apparel, footwear, and accessories for fashion-conscious young men and women. It comes from a top-ranked Zacks Industry (top 28%).
China Petroleum & Chemical Corp. – Yield 4.26%
This is a joint-stock company focusing on its core business of petroleum and petrochemicals with integrated upstream, mid-stream and downstream operations and a complete marketing network. The Zacks Industry Rank is in the top 7%.
"Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Buy 4 Top Stocks Yielding 4% Plus to Beat Rising Rate Fears
Global investors are struck with increasing inflationary and rising rate fears to start 2018. The benchmark U.S. Treasury bond yield spurted to 2.88% on Feb 23, 2018 from 2.46% seen at the start of the year. It now seems to be a matter of a time when we’ll see a 3% plus 10-year U.S. treasury yield.
An analyst said on CNBC that "we didn't pierce 3 percent this time, but the next 10-Year auction in a couple of weeks is probably certain to do that." With benchmark bond yields hovering around a four-year high, the bond market is believed to be ruling the stock market’s future movements.
And further higher yield could lead stocks to come crashing down. Goldman Sachs already forecast that stocks may nosedive 25% if 10-year bond yields hit a high of 4.5% and sees a more than 95% probability of a Fed rate hike in March.
A senior portfolio manager at Sit predicts that the Fed will raise rates four times this year, one more than that have so far been penciled by the central bank. Fears of faster ceases in cheap money inflows will likely hurt stocks.
On the other hand, the U.S. government needs to borrow around $955 billion in 2018 and more than $1 trillion in the next two years. And this need for borrowing comes at a time when interest rates are on an uptrend. All these actions should result in pushing up yields even higher.
Against this scenario, edgy investors might be dumping almost all of their holdings, be it bonds and stocks. However, one thing that investors can do is search for dividend stocks that offer benchmark-beating yields.
After all, such stocks provide investors avenues to make up for capital losses, if that happens at all. Also, dividend investing calls for value investing. Since in its northbound journey, stock valuation got elevated, a value quotient will boost investors’ portfolio at the current level.
Stock Picks
In this vein, below we highlight four top-ranked stocks which have a Zacks Rank #1 (Strong Buy) and a Value Score of A. Plus, these stocks offer a 4%-plus yield.
Sinopec Shanghai Petrochemical Company Limited (SHI - Free Report) – Yield 5.45%
This is China's largest petrochemical company. The stock is from a top-ranked Zacks Industry (top 44%). You can see the complete list of today’s Zacks #1 Rank stocks here.
Waddell & Reed Financial Inc. – Yield – 4.84%
This exclusive underwriter and distributor of mutual fund portfolios belongs to a top-ranked Zacks Industry (top 29%).
The Buckle Inc. (BKE - Free Report) – Yield – 4.55%
It is a retailer of medium to better-priced casual apparel, footwear, and accessories for fashion-conscious young men and women. It comes from a top-ranked Zacks Industry (top 28%).
China Petroleum & Chemical Corp. – Yield 4.26%
This is a joint-stock company focusing on its core business of petroleum and petrochemicals with integrated upstream, mid-stream and downstream operations and a complete marketing network. The Zacks Industry Rank is in the top 7%.
"Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>