Investors seeking to prepare their portfolios for Federal Reserve interest rate hikes may want to turn to high-dividend yield stocks for good returns and stability. Historically, stocks with high-dividend yields struggled when interest rates rose, because higher rates make dividend cash seem less attractive. Lately, however, high-yielding equities show more positive correlations with changes in bond yields and no longer trade like bond proxies. To find which stocks could boost an investor's portfolio, CNBC Pro used FactSet to screen for S & P 500 stocks with dividends per share growth of at least 1% in the past year. We then narrowed the list to those with dividend payout ratios in the bottom half of the index. The payout ratio shows how much of a company's earnings are paid out as dividends. Each stock on this list has a dividend yield above 2% and has a buy rating from at least half of its analysts. Financial institutions, which are set up well to benefit from the pandemic recovery and expanding reopening of the economy, dominate the list. Other cyclically sensitive sectors like energy and industrials are represented as well. Take a look at the list: Sempra Energy has the highest dividend yield on the list, at 3.3%. Its dividend payout ratio, the portion of earnings a company distributes as a dividend, is 32.5%. Devon Energy has both the highest dividend payout ratio, 49.2%, and the biggest dividend per share growth in the past year, 368.2%. Olive Garden parent Darden Restaurants — the only consumer-services name on the list — also has seen significant growth in the past year at 192.4%. It has a dividend yield of 2.8%. Snack company Mondelez International and Hartford Financial are on the lower end of the dividend yield rankings at 2%.
Devon Energy's Jackfish Projects processing plant in Alberta, Canada.
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