2 High-Yielding Dividend Stocks That Also Fight Inflation
As yields on longer-term Treasury bills climb and fears of higher inflation creep into the minds of investors, share prices in several popular sectors are coming under pressure. When bond yields rise, it can take some of the wind out of growth and tech stocks because their future cash flows become less valuable. Further, higher bond yields offer investors a way to earn more from safer assets. That raises the expectations on stocks, for which the bar was already set pretty high.
In contrast, businesses in some sectors benefit when bond yields grow. Bank stocks tend to move higher as the yield on the 10-year Treasury rises because the interest rates on many of their loans are linked to that benchmark (and to other, longer-term bond yields that tend to move in sync with it).
These two bank stocks should greatly benefit from rising bond yields and should also be able to do well with some inflation. And as a bonus, they also have dividend yields now that are significantly higher than the average among S&P 500 stocks.
Source Fool.com
