15 High-Quality Dividend Stocks Worth Considering Amid Rising Interest Rates
Introduction:
The Federal Reserve's recent move to raise interest rates and tighten liquidity has led many individuals to explore alternative investment options. While bonds and high-yield savings accounts seem like safe havens, stocks have historically outperformed them in terms of capital appreciation.
This article highlights 15 top income stocks with strong long-term outlooks and a minimum starting dividend yield of 3%, making them attractive investments even in the face of higher interest rates.
1. The Coca-Cola Co. (KO) - Dividend Yield: 3%
Coca-Cola is a consistent performer and offers consumers a small luxury that remains recession-resistant. With KO stock currently down year-to-date, investors have an opportunity to enter at a discounted price.
2. Pfizer Inc. (PFE) - Dividend Yield: 4.5%
Pharmaceutical giant Pfizer has seen its stock decline despite the company's larger business and expanded profitability. PFE stock is now trading at pre-pandemic levels, offering investors a bargain along with a healthy dividend.
3. The Goldman Sachs Group Inc. (GS) - Dividend Yield: 3.1%
Goldman Sachs, a dominant investment bank, faced challenges in its investment banking business during the 2022 bear market. However, as the stock market recovers and IPO and M&A activities pick up, GS stock is poised for growth, making it an attractive investment.
4. American Tower Corp. (AMT) - Dividend Yield: 3.2%
American Tower is a real estate investment trust focused on mobile communications infrastructure. Despite recent declines in its stock due to rising interest rates, AMT's aggressive expansion in less saturated markets makes it an appealing investment.
5. Black Hills Corp. (BKH) - Dividend Yield: 4.2%
As a utility company with consistent earnings and dividend growth, Black Hills is a "Dividend King" that has increased its dividend for at least 50 consecutive years. Despite being undervalued due to rising interest rates, BKH stock presents an opportunity for investors.
6. Northwest Natural Holding Co. (NWN) - Dividend Yield: 4.5%
Similar to Black Hills, Northwest Natural is a utility company with an impressive track record of consecutive dividend increases. With a multiyear low stock price, NWN presents an attractive investment opportunity.
7. Eastman Chemical Co. (EMN) - Dividend Yield: 3.6%
Eastman Chemical specializes in proprietary chemicals for cutting-edge applications, which offer higher profit margins than commodity chemicals. Despite recent economic concerns, EMN stock is undervalued, presenting a favorable entry point.
8. Whirlpool Corp. (WHR) - Dividend Yield: 4.6%
Whirlpool, a leading manufacturer of home appliances, experienced strong product demand during the pandemic. Although its stock declined, the housing market has remained steady, and WHR stock is attractively priced.
9. Public Storage (PSA) - Dividend Yield: 4%
As America's largest self-storage-focused REIT, Public Storage offers a solution for extra space and performs well even during downturns. Despite interest rate surges impacting the stock, PSA offers a solid dividend.
10. AvalonBay Communities Inc. (AVB) - Dividend Yield: 3.3%
AvalonBay owns apartment buildings in top-tier markets, providing stable demand and higher rents. While AVB stock declined, the rental market remains strong, making it an appealing investment opportunity.
11. Verizon Communications Inc. (VZ) - Dividend Yield: 7.7%
Verizon, one of the dominant U.S. wireless carriers, offers a steady income stream for investors. Despite concerns about rising competition and heavy investments, VZ stock is undervalued, presenting an attractive dividend yield.
12. Grupo Aeroportuario del PacÃfico SAB de CV (PAC) - Dividend Yield: 4.3%*
Grupo Aeroportuario operates airports in Mexico and Jamaica, benefiting from a rapid traffic recovery and projected growth. With a variable dividend policy and a growing business, PAC stock is an appealing investment opportunity.
13. Suncor Energy Inc. (SU) - Dividend Yield: 5.5%
Suncor Energy, one of Canada's largest energy companies, operates with attractive productive properties and refining capacity. Despite recent economic concerns, SU stock is undervalued, presenting an opportunity for investors.
14. State Street Corp. (STT) - Dividend Yield: 3.7%
State Street, a specialized bank focused on trust and custody services, has limited exposure to recent industry challenges. STT stock remains an appealing investment opportunity, offering stability and a solid dividend.
15. OneMain Holdings Inc. (OMF) - Dividend Yield: 8.6%
OneMain Holdings, a consumer finance company, offers attractive dividend yields and the potential for capital appreciation. Despite interest rate hikes, OMF stock provides a unique investment opportunity.
Conclusion:
Although interest rates are rising, high-quality dividend stocks remain an appealing investment option. The 15 stocks mentioned in this article offer strong long-term outlooks and minimum dividend yields of 3%. Investors should consider these stocks as potential options to compound their capital and navigate the changing economic landscape.
