Why wait for U.S. Treasury yields above 4% to rise? Analysts see potential in S&P 500 stocks with yields that are already at 4% or higher.
Investor's Business Daily's analysis of data from MarketSmith and S&P Global Market Intelligence revealed that nine stocks in the S&P 500 include energy company Diamondback Energy (FANG), and consumer goods company Newell Brandss (NWL). All stocks are up this year, and analysts believe they will rise 14% or higher in the next twelve months.
Any S&P 500 stock is more risky than a Treasury, it's certain. Stock market volatility is a risk, as well as the possibility that dividends could be cut. If you can get a 4% yield with a stock that has upside potential, it's a good way to weather the S&P 500's turmoil. The S&P 500 lost 1.5% this year and is close to losing all its gains. The U.S. 10-year Treasury is at 3.98%.
According to Edward Moya, Oanda, "Stocks didn't stand a chance after Fed Chair Powell convinced the markets that policymakers are happy taking this rate hike campaign much higher." "Powell isn't taking any chances, and wants to send home the clear message that Fed will do everything necessary to lower inflation."
The S&P 500 Offers Yield
It's becoming easier to find decent yield after last year's drop in the S&P 500.
S&P 500 stocks paying a dividend have a 2.5% average yield. Some investors want more, particularly with Treasuries giving out almost 4%. You don't want too much stock risk. S&P 500 stocks that yield 4% or more are also down almost 1% this year.
What is the reason why 4%-yielding S&P 500 stocks are up and seeing more growth?
Dividends from the Energy Field
Diamondback, a Midland-based energy company, is what investors are searching for right now.
It yields 7.88%. Shares are up over 4% to 142.53, which is a record. Analysts believe the stock will reach 176.07 per share within 12 months. This would represent a nearly 24% upside.
Newell, a Rubbermaid seller, is another example. This stock has risen 2.4% to 13.39, and yielded 6.8%. Analysts predict that the stock will rise another 21% within 12 months.
Then there are a variety of financials. U.S. Bancorp yields 4.1% The stock has risen nearly 5% to 45.76. Analysts believe it will reach 55.31 per share within 12 months. If true, this would mean a more than 20% increase in the stock's value.
S&P 500 stocks, even though they yield 4% or higher, are more risky than Treasuries. If analysts are correct, however, you will still make some decent money while you wait for volatility to calm down.
Stocks with high yielding S&P 500 stocks and benefits
Analysts see 14% upside and shares are up in this year's fiscal year.
Federal Realty Investment Trust (FRT), 4.0 3.1 14.0 Real Estate
Sources: IBD, S&P Global Market Intelligence