One thing is for sure, despite the reality that at some point this year the Federal Reserve puts in another rate hike, somebody somewhere keeps buying Treasury debt, and the yields continue to plunge lower. Sure they are safe, backed by the full faith and credit of the U.S. government, but owning 30 years debt yielding a 2.66% yield? After taxes and inflation, you are almost at a negative return.
In a recent report from UBS, the managers of the firm’s Dividend Rulers portfolio make just that point, that the decline in long yields has given the stocks in their portfolio a dividend advantage. Not only are the yields consistently higher, but they are being raised on a consistent basis.
We screened the list for the top yielding companies in the portfolio, and came up with four outstanding stocks to buy.
Boeing
Shares of this top aerospace industrial have dropped a whopping 18% since the beginning of the year. Boeing Co. (NYSE: BA), together with its subsidiaries, designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services worldwide. The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital.
Top Wall Street analysts have increased confidence in continuing good demand, and note that the company has made announcements in the past that support the analyst’s thesis that productivity and margins will continue to improve. 787 execution is good as the company works through the backlog, and cash flow looks to be strong with 787 deliveries and C-17 orders. Some Wall Street analysts also point to low oil prices as a bullish indicator for the top carriers who are Boeing’s big customers.
Boeing investors are paid a very solid 3.56% dividend. The Thomson/First Call consensus price target for the stock is $140.17. The shares closed trading on Tuesday at $122.35.
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