Interest Rates Are Going Higher: These 4 Top Dividend Stocks Will Do Just Fine
This company is in the automobile sector but looks to be very inexpensive at current levels. General Motors Co. (NYSE: GM) is the world’s largest automaker, with annual volume of almost 10 million units. The company reports its operations in four regions, North America, Europe, South America, and International, and it has made significant strides in restructuring its business following its 2009 Chapter 11 filing. GM now relies on only four core brands in its key North American segment: Chevrolet, GMC, Buick and Cadillac.
Long-term patient investors that can look beyond current issues may stand to make outstanding money on the auto giant, especially as low gasoline prices continue to push new buyers into showrooms. The stock was hit hard in the summer when Ford missed estimates and much of the blame was placed on incentives, which have been much lower at GM. While shares have rebounded, they are still cheap.
The company reported very solid second-quarter earnings recently, and with gas prices staying at the lowest levels in years, and GM producing some of the best new models in years, the future for the battered stock looks very good. The analysts also feel the company is well prepared for the next downturn.
GM investors are paid a 4.74% dividend. Merrill Lynch has a $43 price target. The consensus target is set at $36.72. Shares closed Monday at $32.04.
This is one of the higher yielding domestic stocks in the energy sector. Occidental Petroleum Corp. (NYSE: OXY) is an oil-levered multinational organization with principal business segments in oil and gas and in chemicals. The oil and gas segment explores for, develops, produces and markets crude oil and natural gas, primarily in the U.S. Permian Basin, Colombia, Bolivia, Libya, Oman, Qatar and Yemen. The chemicals segment manufactures and markets basic chemicals, vinyls and performance chemicals.
With a rock-solid balance sheet and a commitment to dividend coverage, investors look safe for now. Occidental has paid quarterly cash dividends continuously since 1975, and it has increased its dividend each year since 2002.
Shareholders are paid a 4.17% dividend. The $87 Merrill Lynch price target compares with a consensus target is set at $79. The stock closed on Monday at $72.46 per share.
Regardless of what rates do, these four companies should do fine as they have very strong and mature businesses, and a 1.25% increase in fed funds rate over the next two plus years won’t change that fact.