5 High Dividend-Yielding Finance Picks to Combat Coronavirus

The global outbreak of novel coronavirus has become one of the biggest threats for investors. The pandemic has wiped out impressive gains that equity markets made last year. On Thursday, Dow Jones Industrial Average and S&P 500 each recorded a steep fall of about 10%, ending the 11-year bull run.

The Federal Reserve’s emergency rate cut of 50 basis points at the beginning of the month failed to convince investors, resulting in a continued strain on the benchmark U.S. Treasury yields. The central bank recently announced plans to inject more than $1.5 trillion into the banking system to keep yields from falling further. However, continued compression of the yields could make the Fed cut interest rates again when the officials meet for scheduled FOMC meeting next week.

The outbreak of coronavirus has also affected manufacturing levels and other business activities, thereby increasing investors’ concerns of a global economic slowdown. Also, bans on travel and business shutdowns, as efforts to curb the spread of COVID-19, have affected the performance of several companies.

In fact, lower interest rate scenario curbs interest income for finance companies. Further, uncertainty and slowdown in business activities led by the virus outbreak have affected demands for loans. Due to these factors, several finance companies have been forced to cut their sales and earnings forecasts for 2020.

Buying Dividend-Focused Finance Stocks Make Sense

At times of such volatile markets, investors should zero in on stocks that not only pay out consistent dividends but also have long-term growth capabilities.

We have taken the help of the Zacks Stock Screener to shortlist stocks with a 5-year average dividend yield of 3.5% or more. Further, the stocks have an earnings growth projection of more than 5% over the next three-five years. Moreover, the stocks currently carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are the five stocks:

Artisan Partners Asset Management Inc. APAM, based in Milwaukee, WI, has a market cap of $1.6 billion and is an investment manager. The company sports a Zacks Rank #1 at present. Further, the stock has an average dividend yield of 7.6% and an earnings growth projection of 8.6% for three to five years.

Headquartered in San Francisco, CA, JMP Group LLC JMP has a market cap of $58.3 million. It operates as an investment banking and asset management firm. The average dividend yield for the Zacks Rank #2 stock is 6.4%. Its earnings are projected to grow 10% in the long term.

With a market cap of $1.56 billion and a Zacks Rank #2, Navient Corporation NAVI is a leading student loan provider. The Wilmington, DE -based firm’s average dividend yield is 4.7%. Also, its earnings growth projection is 18% for three to five years.

Headquartered in New York, KKR & Co. Inc. KKR has a market cap of $18.6 billion. It operates as an investment firm. The average dividend yield for this Zacks Rank #2 stock is 4.3%. Its earnings are projected to grow 6.5% in the long term.

Federated Hermes, Inc. FHI, based in Pittsburgh, PA, has a market cap of $1.9 billion and is an investment manager. The company presently carries a Zacks Rank of 2. Further, the stock has an average dividend yield of 3.5% and an earnings growth projection of 9.9% for three to five years.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

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KKR & Co. Inc. (KKR) : Free Stock Analysis Report
 
Navient Corporation (NAVI) : Free Stock Analysis Report
 
JMP Group LLC (JMP) : Free Stock Analysis Report
 
Artisan Partners Asset Management Inc. (APAM) : Free Stock Analysis Report
 
Federated Investors, Inc. (FHI) : Free Stock Analysis Report
 
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