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Top 4 High-Dividend Stocks to Stay Guarded From Fed & China
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As the first Fed rate hike of 2018 was already a done-deal, there was no exaggeration in market movement. But what could really send tremors through the asset classes (good or bad) is the Fed guidance and Trump’s tariffs.
Inside the Fed Move & Projections
The Fed raised the benchmark interest rates by a modest 25 bps to 1.50-1.57%, confirming the U.S. economy’s growth momentum and the labor market’s well-being. It marked the sixth-rate hike post-recession, since first lift-off in December 2015.
This part of the story has already baked in asset classes. But investors should note that Fed policymakers had a hawkish tilt in their projections. A steeper path of hike was forecast for 2019 and 2020, though the guidance for the number of rate hikes for 2018 remained untouched.
Federal funds rate projections for 2019 was upped to 2.9% from 2.7% while the rate is guided to accelerate to 3.4% from 3.1% for 2020. Over the longer term, the rate is projected to be 2.9%, up from the December forecast of 2.8%.
The Fed upgraded its forecast for 2018 GDP growth from 2.5% in December to 2.7% and beefed up the 2019 growth forecast from 2.1% to 2.4%. However, growth is likely to slow down in 2020 to 2%. The Fed projected the longer-run growth measure at 1.8%.
PCE inflation expectation remains the same at 1.9% for 2018 and 2% for 2019 but was raised to 2.1% from 2.0% for 2020. Core PCE inflation for 2019 and 2020 were raised to 2.1% from 2.0%. So, some inflationary pressure could be built up ahead.
Tariff War
Meanwhile, the United States and China could be engaged in a trade war and thoughts of it have shaken the investment world.Trump’s order to levy duties on steel and aluminum imports at the start of the month followed by his latest order to impose about $60 billion in import duties on Chinese goods is being held responsible for the fear factor.
Most recently, China announced plans for retaliatory tariffs on $3 billion of U.S. imports as its first hit-back against metals levies. For obvious reasons, Wall Street expressed fears of a trade war, causing a bloodbath in the market.
Time to Buy High Dividend Stocks?
Investors who want to start preparing for an uptick in the funds rate projections, may tap high dividend-paying stocks. After all, high dividends 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. The looming trade tension is another reason for which investors may be in search of dividend-paying stocks that offer benchmark-beating yields.
Below we highlight four stocks that yield at least 5% annually.
Unique Fabricating Inc. – Yields 7.21%
It is a supplier of components in the automotive and industrial appliance market. The stock hails from a top-ranked Zacks industry (top 32%). The stock carries a Zacks Rank #1.The stock has a Value Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Rank #1 company markets, distributes and licenses one of the world's leading lifestyle collections of contemporary apparel and accessories. The stock comes from a top-ranked Zacks industry (top 36%). The stock has a Value Score of C.
The company invests in and develops industrial, commercial and residential real estate in Argentina, Chile and Brazil. The stock hails from a top-ranked Zacks industry (top 25%). It sports a Zacks Rank #1. The stock has a Value Score of A.
The company is one of the nation's premier retailers. The stock belongs to a top-ranked Zacks industry (top 1%). The stock has a Zacks Rank #1. The stock has a Value Score of A.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Top 4 High-Dividend Stocks to Stay Guarded From Fed & China
As the first Fed rate hike of 2018 was already a done-deal, there was no exaggeration in market movement. But what could really send tremors through the asset classes (good or bad) is the Fed guidance and Trump’s tariffs.
Inside the Fed Move & Projections
The Fed raised the benchmark interest rates by a modest 25 bps to 1.50-1.57%, confirming the U.S. economy’s growth momentum and the labor market’s well-being. It marked the sixth-rate hike post-recession, since first lift-off in December 2015.
This part of the story has already baked in asset classes. But investors should note that Fed policymakers had a hawkish tilt in their projections. A steeper path of hike was forecast for 2019 and 2020, though the guidance for the number of rate hikes for 2018 remained untouched.
Federal funds rate projections for 2019 was upped to 2.9% from 2.7% while the rate is guided to accelerate to 3.4% from 3.1% for 2020. Over the longer term, the rate is projected to be 2.9%, up from the December forecast of 2.8%.
The Fed upgraded its forecast for 2018 GDP growth from 2.5% in December to 2.7% and beefed up the 2019 growth forecast from 2.1% to 2.4%. However, growth is likely to slow down in 2020 to 2%. The Fed projected the longer-run growth measure at 1.8%.
PCE inflation expectation remains the same at 1.9% for 2018 and 2% for 2019 but was raised to 2.1% from 2.0% for 2020. Core PCE inflation for 2019 and 2020 were raised to 2.1% from 2.0%. So, some inflationary pressure could be built up ahead.
Tariff War
Meanwhile, the United States and China could be engaged in a trade war and thoughts of it have shaken the investment world.Trump’s order to levy duties on steel and aluminum imports at the start of the month followed by his latest order to impose about $60 billion in import duties on Chinese goods is being held responsible for the fear factor.
Most recently, China announced plans for retaliatory tariffs on $3 billion of U.S. imports as its first hit-back against metals levies. For obvious reasons, Wall Street expressed fears of a trade war, causing a bloodbath in the market.
Time to Buy High Dividend Stocks?
Investors who want to start preparing for an uptick in the funds rate projections, may tap high dividend-paying stocks. After all, high dividends 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. The looming trade tension is another reason for which investors may be in search of dividend-paying stocks that offer benchmark-beating yields.
Below we highlight four stocks that yield at least 5% annually.
Unique Fabricating Inc. – Yields 7.21%
It is a supplier of components in the automotive and industrial appliance market. The stock hails from a top-ranked Zacks industry (top 32%). The stock carries a Zacks Rank #1.The stock has a Value Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Guess?, Inc. (GES - Free Report) – Yields 5.80%
The Zacks Rank #1 company markets, distributes and licenses one of the world's leading lifestyle collections of contemporary apparel and accessories. The stock comes from a top-ranked Zacks industry (top 36%). The stock has a Value Score of C.
IRSA Inversiones Y Representaciones S.A. (IRS - Free Report) – Yields 5.75%
The company invests in and develops industrial, commercial and residential real estate in Argentina, Chile and Brazil. The stock hails from a top-ranked Zacks industry (top 25%). It sports a Zacks Rank #1. The stock has a Value Score of A.
Macy's Inc. (M - Free Report) – Yields 5.26%
The company is one of the nation's premier retailers. The stock belongs to a top-ranked Zacks industry (top 1%). The stock has a Zacks Rank #1. The stock has a Value Score of A.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>