5 Dividend Stocks That Can Thrive Next Year – 24/7 Wall St.


The writing has been on the wall for some time. Federal Reserve Chairman Jay Powell let Pandora out of the interest rate box when he finally noted that the term “transient” inflation should be removed. Faced with rising inflation data, some of which is the worst in more than 30 years, he and the rest of the Fed’s governors have been put in a wedge on their own and will most likely have to raise rates. interest next year, and probably faster. provided that.

In addition, the pace of the decline in quantitative easing is also expected to accelerate. Typically, rising interest rates are bad for many industries as companies’ borrowing costs rise. Still, some companies in specific silos may actually benefit from the rate hike. We’ve found five that make sense to growth and income investors looking to be ready for the increases. It is important to remember that no analyst report should be used as the sole basis for any buy or sell decision.

Capital of Arès

It is a favorite business development company on Wall Street. Ares Capital Corp. (NASDAQ: ARCC) is a leading specialty finance company providing one-stop debt and equity financing solutions to mid-market U.S. companies, venture-backed companies, and production projects. electricity.

Ares Capital initiates and invests in senior guaranteed loans, mezzanine debt and, to a lesser extent, equity investments through its national direct origination platform. The investment objective of the company is to generate both current income and capital appreciation through investments in debt and stocks, primarily in private companies.

Top Wall Street analysts believe the strength of the company’s origination platform, large balance sheet, and abundant liquidity position it favorably in a highly competitive investment environment. Some believe that with the current tight spread environment, Ares Capital has the scale and industry relationships to continue to make competitive, high credit quality investments. Moreover, as the interest rates are expected to increase, they could provide higher coupon loans.

Investors in Ares Capital shares receive a dividend of 7.92%. Citigroup has a buy rating and a target price of $ 23. The consensus target is $ 21.27 and the stock closed at $ 20.69 on Thursday.

READ ALSO: Biotechnology Has Been Crushed: 5 Stocks To Buy Now That Pay Big Dividends

Source link

Comments are closed.