قالب وردپرس درنا توس
Home / Business / Dividend stocks hot this year could even get hotter with the Federal Reserve

Dividend stocks hot this year could even get hotter with the Federal Reserve



Dividend stocks, which performed well this year, could get another boost if the Federal Reserve lowers interest rates.

With lower interest rates, income-seeking investors could use dividend stocks more than ever, and growth investors might be interested in doing so because falling low interest rates prop up the prices of higher-yielding stocks.

The S & P 500 Index

SPX, + 0.97%

has risen by 15.3% this year, due in part to the change in the Federal Reserve's policy in March's pricing as early as Wednesday.

Investors have already expected interest rate cuts by pushing down US Treasury yields across the board, and we now have an inverse yield curve with returns for three and three

TMUBMUSD03M, -0.36%

Treasury bills with a maturity of six months

TMUBMUSD06M, -0.24%

higher than the yield on 10-year notes

TMUBMUSD10Y, + 1.05%

The policy statement of the Federal Open Market Committee will be published at 14.00. June 19th. Read more about the Fed:

• Mark Hulbert: How to Make Money with the Fed Meeting This Week

• The story suggests that the Fed can not make any "insurance cuts" to expand Keeping alive

• A Surprising interest rate cut by the Federal Reserve could be the best decision: Caroline Baum

• Opinion: The stock market will be deeply disappointed by a Fed rate cut

The inverse yield curve has become traditional considered as an indicator of a coming recession. On the other hand, Mark Grant, the chief fixed income securities strategist for B. Riley, said in his "Out of the Box" email on June 12 that he believed interest rate reversal "only reflects that the Fed remains so today Treasury bills did not buy and so the 800-pound gorilla has not yet entered this room, but I expect it shortly. "

European Central Bank President Mario Draghi added fuel to the Tuesday's fire and said the Eurozone economic indicators are "downwards" and that "additional stimulus is needed" if the numbers are not correct.

The expectation of renewed Fed stimulus has led to a good performance in three of the S four stock sectors & P 500 with weighted total dividend yields of over 2.5%, where the 11 sectors are ranked by dividend yields and show the weighted aggregate price changes in this and the let centenary year:

S & P 500 sector Current dividend yield Price change – 2019 to 17 June Price change – 2018
Energy 3.79% 6.5 % -20.5%
Utilities 3.27% 13.5% 0.5%
Real Estate 3.17% 22, 1% -5.6%
Consumer Staples 2.87% 15.3% -11.2%
Finance 2.14% 12.7% – 14.7%
Materials 2,11% 12,9% -16,4%
Industry 1,98% [19659022] 16.4% -15.0%
Healthcare 1.80% 5.6% 4.7%
Information Technology 1.52% 22.5% -1.6%
Communication Services 1.41% 17.4% [19659022] -16.4%
Consumer Discretionary 1.34% 19.9% ​​[19659022] -0.5%
S & P 500 Index 1.99 % 15.3% -6.2%

Apart from the energy sector, which is associated with the uncertainties of oil and natural gas The prices, utilities, real estate and consumer staples sectors have performed well this year, especially considering that most companies in these sectors are not considered dynamic, fast-growing innovators.

It is notable to see a 22% increase in the real estate sector in 2019 excluding dividends, even after the S & P 500 was slightly surpassed in 2018.

Dividend Stock Lists

The best way to invest in dividend stocks may be to focus on increasing payouts, as discussed in more detail here, rather than on higher yields. Below is a list of higher-yielding stocks that are subject to specific criteria.

When considering ordinary shares with high current dividend yields, it is very important that you have confidence in a company's ability to sustain and increase the dividend. You should also do your own homework and look at the history of dividend payments. Has the dividend been reduced in recent years? When? Why? This and your own careful consideration of the company's competitiveness over the next 10 years are important factors.

One way to estimate a company's ability to maintain or increase the dividend is to compare the free cash flow return to the dividend yield. Free cash flow is the remaining cash flow after planned investments. With this money, dividend payments can be made, shares repurchased, acquisitions made, organic or expanded for other corporate purposes. If the free cash flow return is lower than the dividend yield, this is not a good sign. If it is not a temporary phenomenon, the company may need to lower the dividend.

For real estate investment funds, the Funds from Operations (FFO), a non-GAAP value, is used in the industry to measure the dividend payment ability. FFO reintroduces depreciation, while profits from the sale of real estate are deducted. Therefore, REITs are listed separately below.

Non-REIT Dividend Shares

Looking at the free cash flow of the last four quarters reported, there are 53 non-REIT S & P 500 stocks with dividend yields of 3.5% or more, the "margin "To cover higher dividend payments.

Here are the 10 highest dividend yields that have not cut their regular dividend payments over the past five years (20 quarters). This is from FactSet data:

Company Ticker Industry Dividend Yield Free Cash Flow Yield – Last Four Quarters "Headroom"
Macy's Inc .

M, + 0.83%

Department Stores 6.95% 9.55% 2.60%
Newell Brands Inc

NWL, + 1,72%

Industrial Conglomerates 6,33% 8,64% 2,31%
AT & T Inc.

T, + 0.43%

Telecommunications 6,32% 10,71% 4,39%
Altria Group Inc

MO, -1.45%

Tobacco 6,29% 8,00% 1,71%
Occidental Petroleum Corp ,

OXY, + 1.08%

Oil and gas production 6,26% 6,44% 0,17%
Invesco Ltd.

IVZ, + 0.99%

Investment Manager 6.15% 14.42% 8.26%
Ford Motor Co .

F, + 0,50%

Motor vehicles 5,97% 18,45% 12,48%
Nielsen Holdings PLC

NLSN, -0.17%

Advertising / Marketing Services 5,97% 12,22% 6,26%
Philip Morris International Inc.

PM, -1,13%

Tobacco 5,85% 6,55% 0,70%
Source: FactSet

For more you can click on the ticker above every company, including stock performance charts and coverage.

Many of these companies survive storms, including Macy's

M, + 0.83%

Competing with Amazon.com

AMZN, + 0.81%

and other online retailers as well as AT & T

T, + 0.43%

which is undergoing a brutal phase of decline among subscribers to its pay-TV services, to name but two examples. It is therefore not surprising that only two of these companies are favored by a majority of sell-side analysts:

Company Ticker Stock Buy Ratings Stock Neutral Ratings Share & # 39; Sell & # 39; Ratings Closing Price – June 17 Consensus Price Target Implicit 12 Month Upside Potential l
Macy & # 39; s Inc.

M, + 0.83%

18% 59% 23% $ 21.72 $ 23.64 9%
Newell Brands Inc [19659021]

NWL, + 1.72%

17% 83% 0% $ 14.54 $ 19.20 32%
AT & T Inc. [19659021]

T, + 0.43%

50% 43% 7% $ 32,30 $ 33,75 4%
Altria Group Inc. [19659021]

MO, -1.45%

47% 35% 18% 50.86 $ 58.73 $ 15%
Occidental Petroleum Corp. 19659021]

OXY, + 1.08%

20% 80% 0% 49.81 $ 64.79 $ 30%
Invesco Ltd. ]

IVZ, + 0.99%

18% 76% 6% $ 20.15 $ 22.64 12%
Ford Motor Co. [19659021]

F, + 0.50%

37% 58% 5% $ 10.05 $ 10.88 8%
Nielsen Holdings PLC [19659021]

NLSN, -0.17%

69% 31% 0% 23.46 $ 28.53 $ 22%
Philip Morris International Inc.

PM, -1.13%

65% 30% 5% 77.99 $ 93.39 $ 20%
Seagate Technology PLC [19659021]

STX, + 4.12%

31% 54% 15% $ 44.36 $ 50.24 13%
Source: FactSet [19659141] Here are the 10 stocks in this 53-strong group with the highest percentages of FactSet's "buy" or equivalent ratings of analysts re-examined to exclude all companies listed in the last five years have regularly lowered their dividends:

companies ticker industry stock buy ratings dividend yield free cash flow yield – after four quarters "headroom"
Marathon Petroleum Corp. [19659021]

MPC, + 1,91%

Oil Refining / Marketing 94% 4,35% 11,76% 7,40 %
Citizens Financial Group Inc. [19659021]

CFG, + 2,65%

Regional banks 86% 3,72% 6,13% 2,41% [19659024] Valero Energy Corp.

VLO, + 1,13%

Oil refining / marketing 85% 4,68% 8,80% 4, 12%
Tapestry Inc.

TPR, + 2,19%

Retail sale of clothing and footwear 79% 4,55% 8,66% 4 , 11%
Chevron Corp.

CVX, + 1,27%

Integrated oil 73% 3,92% 7,34% 3,42%
Prudential Financial Inc.

PRU, + 1,58%

Financial Conglomerates 70% 4,08% 54,89% 50,80% [19659024] Nielsen Holdings PLC

Advertising and marketing services

69% 5,97% 12,22% 26%
Phillips 66

PSX, + 1.04%

Oil refining / marketing 68% 4,19% 7,28% 3, 09%
Leggett & Platt Inc. [19659021]

Furnishings

67% 4,25% 5,45% 19659028] CVS Health Corp.

CVS, + 0.22%

Drugstore chains 67% 3,67% 8,71% 5,05% [19659297] Source: FactSet
REITs [19659072] There are 31 real estate investment funds in the S & P 500. Here are the eight with a dividend yield of at least 3.5%, whose "headroom" on funds from operations (FFO) is the based on last 12 months reported and also considered as harbor in the last five years not lowered:

REIT Ticker Dividend yield FFO yield – after four quarters "Headroom"
Macerich Co.

MAC, -0.03%

8.54% 10.56% 2.02%
Kimco Realty Corp.

KIM, -0.11%

5.89% 7.68% 1.79%
Simon Property Group Inc.

SPG, -0.25%

4.86% 7.39% 2.52%
Host Hotels & Resorts Inc.

HST, + 0.59%

4,31% 9,82% 5,50%
Welltower Inc.

WELL, -0.68%

4.16% 4.87% 0.71%
SL Green Realty Corp.

SLG, -3.50%

3.84% 7.50% 3.66%
Realty Income Corp.

O, -0.93%

3.71% 4.28% 0.58%
Digital Realty Trust Inc.

DLR, -0.05%

3.53% 5.47% 1.94%
Source: FactSet

Here is a summary of Analyst Opinions on These Eight REITs:

REIT Ticker Stock Ratings Neutral Stock Ratings Stock Ratings Closing Price – June 17 Consensus Target Implied 12-Month Upside Potential
Macerich Co.

MAC, -0.03%

22% 67% 11% $ 35.14 $ 44.71 27%
Kimco Realty Corp. 19659021]

KIM, -0.11%

27% 59% 14% 19.01 $ 18.03 $ -5 %
Simon Property Group Inc.

SPG, -0.25%

71% 29% 0% $ 166.54 $ 191.95 15%
Host Hotels & Resorts Inc.

HST, + 0.59%

38% 38% 24% $ 18.54 $ 20.95 13%
Welltower Inc. [19659021]

WELL, -0.68%

38% 62% 0% $ 83.61 $ 80.82 -3 %
SL Green Realty Corp.

SLG, -3.50%

47% 42% 11% 88.52 $ 98.22 $ 11%
Realty Income Corp. 19659021]

O, -0.93%

26% 63% 11% 73.28 $ 72.07 $ -2 %
Digital Realty Trust Inc.

DLR, -0.05%

58% 42% 0% 122.49 $ 125.86 $ 3%
Source: FactSet [19659141] Do not Miss This: This fund manager goes his own way in China, looking beyond trading.

Here, you will create an e-mail alert for Philip van Doorn's Deep Dive Columns. [19659438]
Source link