For Immediate Release
Chicago, IL – June 25, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Procter & Gamble (PG), Exelon (EXC), American Capital Agency Corp (AGNC), Global X SuperDividend ETF (SDIV) and EG Shares Low Volatility Emerging Markets Dividend ETF (HILO).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Friday’s Analyst Blog:
Where Do You Go for Yield?
While the economy is certainly sluggish, it is difficult to argue that the sentiment is as bad now as it was in the dark days of 2008. Yet despite this, the ultimate safe haven— U.S. Treasury bonds—are approaching all time highs in price and record lows in terms of yield.
10 year government debt is now sporting a paltry 1.65% yield while 30 year securities currently have rates around the 2.70% mark, figures that rival 2008 levels and are at least half of what investors saw in these notes a decade ago. Since Bernanke has pledged to drive the longer term rates lower via a continuation of Operation Twist, it seems highly likely that these low levels could be here to stay for quite some time (read 4 Rules of Dividend Investing).
Given this policy, investors have been forced to seek high dividend paying stocks for current income opportunities. Luckily for these income-starved investors, there are a host of securities that have yields above even the 30-year Treasury payout. Not only that, but these stocks offer up the potential to appreciate in value as well, something that is much more difficult to say for Treasury bonds that are trading near all-time highs.
However, the space is not without risk as many of the most popular dividend safe havens have had a rough time in the face of the weak economy. Procter & Gamble (PG) and Exelon (EXC), for example, both pay out yields above the 30 year treasury rate but have seen their prices fall by, respectively, 9% and 13% in year-to-date terms.
Clearly, investing for yield can still be fraught with risk, even when buying ultra-safe companies that operate in ‘safe haven’ segments of their respective industries. Still, options are limited in the bond market—unless you are willing to tread into the junk space—suggesting that for many investors, income is going to have to come from stocks for the foreseeable future.
Unfortunately, each of the main dividend segments has their own issue which could either cut payouts in the future, or at least depress stock prices in the near term (see 11 Great Dividend ETFs).
Big Pharma is facing a patent cliff, while integrated oil is fighting against low oil prices. Additionally, consumer staples are up against a slowdown in demand from emerging markets, while utilities haven’t been helped by the tepid economic recovery here in the U.S.
So, the question is, given the uncertainty and the low rate environment, where do investors go for yield?
Personally, I am intrigued by the MLP segment, American Capital Agency Corp (AGNC), and some high quality names in the international ETF space such as the Global X SuperDividend ETF (SDIV) and the EG Shares Low Volatility Emerging Markets Dividend ETF (HILO). These securities all have outsized yields and can be more immune to economic shocks thanks to either their diversified holdings, or the stable payouts inherent in their businesses (read Invest Like The One Percent With These Three ETFs).
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
More From Zacks.com