Consider seeking shelter in these dividend growers offering more yield than the surging 2-year rate

As the Federal Reserve’s rate-hiking cycle shows few signs of a slowdown, searching for safety is becoming key for investors. In recent weeks, some investors have found that safe haven in the 2-year Treasury note, which had its yield rise to a near 15-year high of 3.516% at one point on Thursday. Data from Bespoke Investment Group indicates that’s more than double the yield of the S & P 500 . The latest moves in the short-term Treasury market — where bond yields move inversely to prices — could spell higher returns for investors going forward. It’s also created a unique opportunity for buyers looking for income stability as equities continue their decline and risk appetite dries up among some investors. That said, there are some stocks continuing to offer similar or greater dividends than the yield on the 2-year note, which could mean more upside to patient investors in the future. To find these opportunities, CNBC Pro used FactSet to screen for S & P 500 stocks offering a higher dividend yield than the surging 2-year Treasury note. We also searched for stocks that are loved by analysts, with more than 50% saying to buy them and are expected to grow dividends by at least 5% next year. All the stocks boast an annual dividend of at least $1 per share. These are the names that came up: Of the stocks that made the cut, Devon Energy heeded the largest yield (6.6%), with an annual dividend of $1.30. Like other energy companies, shares of Devon have skyrocketed this year and are trading up 54% as oil prices surge. Analysts expect the company to grow its dividend by more than 202% next year. Going forward, Advance Auto Parts is expected to grow dividends per share by 225%. That’s the biggest expected growth among the stocks within the screen. The company, which recently shared disappointing earnings and guidance as it grapples with rising inflation, pays a $3.30 annual dividend or a yield of 3.5%. A slew of financial companies and banks including Morgan Stanley and Fifth Third Bancorp also joined the list, with yields of 3.7% and 3.5%, respectively. Real estate investment trust VICI Properties , Olive Garden parent company Darden Restaurants and AbbVie also made the list.

Leave a Reply

Your email address will not be published. Required fields are marked *