3 Stocks to Watch on Dividend Hikes as Inflation Woes Prevail
The Fed decided to keep its interest rates unaltered for the first time in 15 months in its June FOMC meeting. The decision was cheered by investors that sent stocks on a rally. However, all three major indexes snapped their multiweek winning streaks last week as concerns of the economy slipping into a recession grew once again.
This saw the Dow ending 1.7% lower last week, while the S&P 500 and Nasdaq each finished 1.4% lower, snapping their five and eight straight weeks of gains.
Inflation has shown signs of easing, but the Fed has said that the crisis is far from over. Fed Chair Jerome Powell maintained his hawkish stance last week during his Congressional testimony. He said that two more rate hikes of 25 basis points each will be required by the end of this year.
The Fed has increased interest rates by 500 basis points since March 2022, with the terminal interest rate now at 5.6% instead of 5.125%. The Fed’s decision to continue with its interest rate hikes comes as inflation is still a lot elevated than its target level of 2%.
Understandably, market participants are concerned about the economy’s health and are trying to gauge the Fed’s next course of action. Given the Fed’s stance and the multi-year high inflation, it is unlikely that the first interest rate cut will be any time before 2025, although market participants believe it could also be some time in 2024.
Markets are thus likely to remain volatile for a longer period than expected, maybe throughout this year.
Stocks in Focus
Given this situation, investing in dividend-paying stocks would be a wise decision. Dividend stocks with a solid business plan and a proven track record are known for handling market volatility. An astute investor should thus consider stocks that have recently raised their dividend payments. Three such companies are Matson, Inc. MATX, Investar Holding Corporation ISTR and Hamilton Lane Incorporated HLNE.
Matson, Inc. operates as an ocean transportation and logistics company. MATX offers shipping services in Hawaii, Guam and Micronesia islands and expedited service from China to southern California. Matson sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
On Jun 22, Matson announced that its shareholders would receive a dividend of $0.32 a share on Jul 9, 2023. MATX has a dividend yield of 1.65%. Over the past five years, Matson has increased its dividend six times, and its payout ratio at present sits at 6% of earnings. Check Matson’s dividend history here.
Matson, Inc. Dividend Yield (TTM)
Matson, Inc. dividend-yield-ttm | Matson, Inc. Quote
Investar Holding Corporation is a bank holding company for Investar Bank. ISTR offers a range of commercial and retail lending products throughout its market areas, including business loans to small to medium-sized businesses and professional concerns, as well as loans to individuals.
On Jun 21, Investar announced that its shareholders would receive a dividend of $0.10 a share on Jul 31, 2023. ISTR has a dividend yield of 3.25%. Over the past five years, Investar has increased its dividend 13 times, and its payout ratio at present sits at 15% of earnings. Check Investar’s dividend history here.
Investar Holding Corporation Dividend Yield (TTM)
Investar Holding Corporation dividend-yield-ttm | Investar Holding Corporation Quote
Hamilton Lane Incorporated is an investment management firm, which provides private market solutions. HLNE operates primarily in the United States, Europe, Asia, Latin America and the Middle East. Hamilton Lane is based in Bala Cynwyd, Pennsylvania.
On Jun 14, Hamilton Laneannounced that its shareholders would receive a dividend of $0.45 a share on Jul 7, 2023. HLNE has a dividend yield of 2.34%. Over the past five years, Hamilton Lanehas increased its dividend five times, and its payout ratio at present sits at 48% of earnings. Check Hamilton Lane’sdividend history here.
Hamilton Lane Inc. Dividend Yield (TTM)
Hamilton Lane Inc. dividend-yield-ttm | Hamilton Lane Inc. Quote
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