The Federal Reserve’s aggressive policy tightening to tame the multi-decade high inflation is increasing the chances of the economy slipping into a recession. This, along with concerns related to continued supply disruptions and rising energy and food prices, is driving immense volatility in the stock market.
While the S&P 500 and the teach-heavy Nasdaq declined more than 20% and 28%, respectively, this year, the Dow Jones Industrial Average has lost more than 16%. The blue-chip index is on the brink of seeing its worst first half since 1962.
However, instead of steering clear of stocks, investors could survive the market slump by investing in dividend-paying stocks Enterprise Products Partners EPD, Arbor Realty Trust ABR, Kinder Morgan KMI, The Buckle BKE and Avnet AVT, which has Zacks Rank #1 (Strong Buy) or 2 (Buy). In addition to generating a steady income, these stocks could rebound soon.
The widely tracked inflation gauge — the consumer price index (CPI) —jumped 8.6% in May, hitting a 40-year high. Since inflation is expected to remain elevated in the foreseeable future, experts expect the central bank to tighten the policy further.
The Fed recently hiked interest rates by 75 basis points, the highest increase since 1994, and has kept the door open for further rate hikes to bring prices down. As this will lead to skyrocketing borrowing costs, many experts expect the economy to slip into a recession.
Against a backdrop of inflationary pressure, the COVID-19-led supply-chain disruptions have been aggravated by the Russia-Ukraine war. This obviously doesn’t bode well for the economy.
The Russia-Ukraine war has dampened consumer sentiments, threatened economic growth, established market barriers, curtailed the movement of indispensable commodities, and eventually jacked up prices.
With the U.S. economy reeling under inflationary pressure and the chances of a recession increasing, the stock market is taking its share of hard knocks.
Despite such distress, investors should focus on dividend-paying companies with a sustainable business model and a long history of profitability.
Here are five such stocks that boast a Zacks Rank #1 or 2 and offer high yields.
Enterprise Products Partners is one of the primary midstream energy players in North America, and has a vast network of pipelines.
Enterprise Products Partners has a dividend yield of 7.61%. In the past 5-year period, EPD has increased its dividend 13 times, and its payout has advanced 1.9%. To see the stock’s dividend history, please click here.
Enterprise Products Partners L.P. dividend-yield-ttm | Enterprise Products Partners L.P. Quote
Shares of Enterprise Products Partners have gained 9.7% so far this year. Currently, EPD has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arbor Realty Trust is a real estate finance company that primarily invests in real estate-related assets.
Presently, Arbor Realty has a dividend yield of 11.76%. ABR has increased its dividend 16 times in the past five years, and its payout has increased 15.5%. To see the stock’s dividend history, please click here.
Arbor Realty Trust dividend-yield-ttm | Arbor Realty Trust Quote
Shares of Arbor Realty have lost 19.9% over the past month. At present, ABR has a Zacks Rank #2.
Kinder Morgan is a midstream energy infrastructure provider in North America.
Currently, Kinder Morgan has a dividend yield of 6.67%. In the past 5-year period, KMI has increased its dividend five times, while its payout has advanced 19.05%. To see the stock’s dividend history, please click here.
Kinder Morgan, Inc. dividend-yield-ttm | Kinder Morgan, Inc. Quote
KMI’s shares have already gained 3% year to date. At the moment, KMI sports a Zacks Rank #1.
The Buckle is primarily a retailer of casual apparel, footwear and accessories.
Buckle has a dividend yield of 4.75%. Over the past five years, BKE has increased its dividend five times, while its payout has increased 7.87%. To see the stock’s dividend history, please click here.
Buckle, Inc. The dividend-yield-ttm | Buckle, Inc. The Quote
Shares of Buckle have lost 3.9% over the past month. At this point in time, BKE has a Zacks Rank #2.
Avnet is one of the largest distributors of electronic components across the globe.
Avnet has a dividend yield of 2.44%. Over the past five years, AVT has increased its dividend six times, while its payout has advanced 6.32%. To see the stock’s dividend history, please click here.
Avnet, Inc. dividend-yield-ttm | Avnet, Inc. Quote
AVT’s shares have gained 6.4% over the past year. Presently, AVT has a Zacks Rank #1.
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