Markets have been suffering since the beginning of 2022, and the bearish sentiment remains dominant as the year comes to an end due to fears of a recession in the U.S. economy. The Fed has indicated further rate hikes in 2023, causing investor concerns and markets to suffer.
Year to date, the Dow, the S&P 500 and the Nasdaq have yielded negative returns of 8.15%, 18.63% and 31.55%, respectively. The biggest challenge for the U.S. economy is presently multi-year high inflation. Although inflation has lately shown signs of cooling off, the crisis is far from over.
Fed to Continue Hiking Rates
The consumer pricing index (CPI) data for November showed a 7.1% year-over-year increase in inflation, indicating a slowdown from the record highs of 8.2% in September and 8.3% in August. However, it is still at multi-year highs and the Fed has indicated more rate hikes in 2023.
The Fed hiked interest rates by 50 basis points in its December meeting, after going for four consecutive hikes of 75 basis points earlier. The current cumulative interest rate, which is in the 4.25-4.5% range, is the highest since 1980.
Markets participants were initially optimistic that the Fed would go slow on its aggressive rate-hike stance, given that inflation showed signs of cooling in November.
The Fed also echoed similar sentiments and slowed down its pace. However, Fed Chair Jerome Powell continued with his hawkish monetary policy and cautioned that the fight against inflation is not yet over and that significant questions, including how much and how long interest rates would need to be raised, remain unresolved.
Market participants are concerned that the high borrowing costs, which are still far from the Fed’s aim of 2%, could hurt the economy and push it into a recession.
Moreover, geopolitical tensions also have left markets unsettled. The ongoing Russia-Ukraine war, which caused a global oil and gas shortage, is having indirectly affecting the supply chain.
Also, the recent rise in COVID-19 cases and deaths in China have compelled Beijing to implement restrictions once again, reducing business and consumer activity. These have have affected global business and markets.
Given this situation, it makes sense for an astute investor to keep an eye on dividend-paying stocks. This is because dividend stocks have the potential to endure market volatility and a track record of success and a solid business plan.
Dividend stocks not only offer a consistent flow of revenues but also minimize the likelihood of frequent price changes. Additionally, during times of market turbulence, dividend-paying stocks have consistently outperformed non-dividend-paying stocks. Four such companies are
Sandstorm Gold Ltd.
SAND
,
The Mosaic Company
MOS
,
The Ensign Group, Inc.
ENSG
and
Preferred Bank
PFBC
.
Sandstorm Gold Ltd.
is a gold streaming company engaged in providing upfront financing for gold mining companies. SAND focuses on completing gold purchase agreements with gold mining companies that have advanced-stage development projects or operating mines. Sandstorm Gold Ltd presently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
On Dec 21, 2022, Sandstorm Gold Ltd announced that its shareholders would receive a dividend of $0.02 per share on Jan 21, 2023. SAND has a dividend yield of 1.10%. Over the past five years, Sandstorm Gold Ltd has increased its dividend two times, and its payout ratio is presently 31% of earnings.
Check SAND’s dividend history here
.
The Mosaic Company
is a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry. MOS was formed through the combination of the fertilizer businesses of agribusiness giant Cargill Incorporated and IMC Global Inc. The Mosaic Company is the biggest integrated phosphate producer globally and among the four largest potash producers in the world.
On Dec 16, 2022, The Mosaic Company declared that its shareholders would receive a dividend of $0.20 per share on Jan 16, 2023. MOS has a dividend yield of 1.32%. Over the past five years, Sandstorm Gold Ltd has increased its dividend five times, and its payout ratio is presently 5% of earnings.
Check MOS’s dividend history here
.
The Ensign Group, Inc.
provides health care services in the post-acute care continuum, urgent care center and mobile ancillary businesses in the United States. ENSG’s ancillary businesses are in Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, Oklahoma, Oregon, South Carolina, Texas, Utah, Washington, Wisconsin and Wyoming.
On Dec 16, 2022, The Ensign Group declared that its shareholders would receive a dividend of $0.06 per share on Jan 31, 2023. ENSG has a dividend yield of 0.23%. Over the past five years, The Ensign Group has increased its dividend six times, and its payout ratio is presently 6% of earnings.
Check ENSG’s dividend history here
.
Preferred Bank
is one of the largest independent commercial banks in California focusing on the Chinese-American market. PFBC offers a broad range of deposit and loan products and services to both commercial and consumer customers. Preferred Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high-net-worth individuals.
On Dec 15, 2022, Preferred Bank announced that its shareholders would receive a dividend of $0.55 per share on Jan 20, 2023. PFBC has a dividend yield of 2.35%. Over the past five years, Preferred Bank has increased its dividend six times, and its payout ratio is presently 22% of earnings.
Check PFBC’s dividend history here
.
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