The Federal Reserve plans to hold benchmark interest rates unchanged for now despite rising concerns regarding inflation. And because job growth fell short of consensus expectations in April, placing a small question mark next to the robustness of the economic recovery, we think investors that are seeking a steady income stream should invest now in dividend paying stocks Northrop Grumman (NOC), Sysco (SYY), and The Mosaic (MOS). All three names have recently hiked their dividends. Read on.The Federal Reserve’s dovish monetary policy stance has played a huge role in the U.S.’ fast-paced economic recovery. Despite rising inflation rates the Fed plans to stick with its “cheap money” policy even as markets exhibit signs of a “taper tantrum”. San Francisco Federal Reserve President Mary Daly recently said in a CNBC interview that she is bullish regarding the future, but that substantial progress has to be made before the central bank can tighten its monetary policy. Indeed, April's job growth data was disappointing.
As a result, Treasury yields dipped slightly on May 26. The 10-year benchmark Treasury yield stood at 1.56%. The Fed’s plan to hold interest rates at near zero levels in the short term, coupled with increasing market volatility and declining Treasury yields, has been motivating investors to focus on high-yield dividend paying stocks.
Northrop Grumman Corporation (NYSE:NOC), Sysco Corporation (NYSE:SYY) and The Mosaic Company (NYSE:MOS) hiked their quarterly dividend payouts recently based on strong performance and stable cash flows. We think their strong fundamentals and growth potential should allow them to sustain their payouts over the long term, making them attractive investment bets now.