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For Immediate Release
Chicago, IL – June 03, 2016 – 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 Rose Rock Midstream, L.P. (RRMS), TC PipeLines, LP (TCP), W. P. Carey Inc. (WPC) and Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday’s Analyst Blog:
Top 4 Dividend Stocks to Ride an Unpredictable June
Even though markets ended in the green in May, things could get a little dicier this month. A slew of potential events can make the markets choppy, eventually derailing stocks. A possible rate hike by the Fed, uncertainty around job numbers and doubt regarding U.K.’s referendum on its European Union membership have made investors cautious in June. Moreover, June has predominantly been the worst month of the year in the last decade.
Furthermore, we are in the midst of the Democratic primary race. So a lot of gyration can be expected in the stock market. To minimize such market turmoil, it’s time to invest in solid dividend paying stocks. But before we select such stocks, let’s look at the events that may weigh upon the markets this month.
Fed Rate Hike
The Fed’s next policy meeting is on Jun 15. Fed Chair Janet Yellen has already said that its “probably” appropriate to hike rates in the upcoming months provided the economy shows signs of improvement. She also said that the economy is picking up following a sluggish first quarter. She added that both oil prices and the dollar are “roughly stabilizing,” which will eventually help inflation to climb up to the Fed’s target level.
Investors have more or less come to terms that the economy can bear another quarter point increase in interest rates. However, if the Fed does hike rates in June, then chances are they might raise two or three times this year instead of one or two, which might upset the bulls. Let’s also not forget that U.S. stocks tanked almost 12% in mid-December following Fed’s quarter point rate hike for the first time in nearly 10 years. We should not rule out a similar negative reaction this time as well.
Jobs and Wage Growth
The jobs report for May is due tomorrow and, if it is a repeat of April, then the markets can be flurried yet again. In April, 160,000 new jobs were added, which turned out to be weaker than expected. A weak jobs growth will negatively impact the confidence of consumers. This might hamper spending levels that have been one of the bright spots driving the U.S. recovery.
In fact, consumer confidence had declined in May, clouding economic outlook. The Conference Board’s consumer confidence index dropped to 92.6 in May from 94.7 in April. The index touched its lowest level in six months in May and also registered its second consecutive monthly decline.
On the other hand, if we receive an encouraging jobs report then it might propel wage growth. Any increase in wages could raise inflation fears and spook the broader markets. The Fed’s preferred gauge of inflation had already increased in April. The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, increased 0.2% in April after edging up 0.1% in March. On a year-over-year basis, the core PCE advanced at a rate of 1.6%.
“Brexit” Vote
In addition to these domestic events, on Jun 23, Britain will vote whether or not to remain in the European Union. Many feared that Britain might opt for a Brexit. It was cited that anxiety regarding the migration issue might sway voters in favor of leaving.
Nevertheless, recent polls suggest that Brits may opt to stay in the 28-country European Union. But, what if they choose not to stay? Such an event is currently not priced in the markets. If it does happen then it could result in economic disruptions in both the U.K. and Europe. This will have a rippling effect on the global markets, causing a lot of turmoil. The U.S. too won’t be spared.
4 Strong Buy Dividend Stocks to Beat Volatility
Investors are on high alert even though the Dow is coming off its best weekly advance in 10 weeks and other key indexes are in the green in May. And why is this so? This is because June calls for a lot of events that can result in gyrations in the market, eventually dragging stocks down this summer. Adding to the woes, since 1950, the Dow posted an average decline of 0.3% in June, according to The Stock Trader’s Almanac.
Meanwhile, Hillary Clinton and Bernie Sanders are competing for the Democratic Party leadership nomination, with Donald Trump the presumptive presidential nominee from the Republican Party. The Democratic primary race along with Presidential Elections continues to make the currency market volatile. Any fluctuation in the foreign exchange market will adversely impact the equity markets, as well as your overall investment returns.
As more volatility is in the cards, adding top-notch dividend stocks to your portfolio will be a prudent decision. Companies that pay consistent dividends put a ceiling on market declines. These companies are financially stable and generate consistent cash flows irrespective of market conditions. Such stocks, most importantly, when combined with a Zacks Rank #1 (Strong Buy), are expected to boost returns. The favorable Zacks Rank should help these stocks to continue gaining this year as well.
Rose Rock Midstream, L.P. (RRMS) operates, develops and acquires a portfolio of midstream energy assets. RRMS is headquartered in Tulsa, OK. RRMS offers a whopping dividend yield of 10.23%. RRMS’ 5-year historical dividend growth rate is 35.4%.
TC PipeLines, LP (TCP) acquires, owns and participates in the management of energy infrastructure businesses in North America. TCP is headquartered in Houston, TX. TCP offers a promising dividend yield of 6.45%. TCP’s 5-year historical dividend growth rate is 3.5%.
W. P. Carey Inc. (WPC) is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. WPC is headquartered in Dallas, TX. WPC offers an encouraging dividend yield of 6.08%. WPC’s 5-year historical dividend growth rate is 15.22%.
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) provides debt and equity financing to the energy efficiency and renewable energy markets in the U.S. HASI is headquartered in Annapolis, MD. HASI offers a solid dividend yield of 5.9%. HASI’s 5-year historical dividend growth rate is 45.3%.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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