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Buy these 2 stocks that pay you more than the 10-year yield, says expert

Added 05-24-19 01:02:02pm EST - “Six S&P 500 sectors now sport similar or higher dividend yields than the U.S. 10-year Treasury, and some experts like what they see in the groups.” - Cnbc.com


Posted By TheNewsCommenter: From Cnbc.com: “Buy these 2 stocks that pay you more than the 10-year yield, says expert”. Below is an excerpt from the article.

With the U.S. 10-year Treasury yield falling to its lowest level since October 2017 amid rising trade tensions, six S&P 500 sectors now offer comparable or higher yields than the federally issued bond's 2.32% return.

They are: the financials, with a 2.22% yield; the materials, with a 2.30% yield; the consumer staples, with a 2.91% yield; real estate investment trusts, with a 3.25% yield; utilities, with a 3.29% yield, and energy, at 3.78%.

"Typically, if a company wants to pay a dividend, you need to have a solid balance sheet and strong cash flow, and those are the kinds of companies that do well when times get tough," Mark Tepper, president and CEO of wealth management firm Strategic Wealth Partners, said Thursday on CNBC's "Trading Nation."

"So, of all the sectors, we like financials, but I still think you need to pick the winners, not the sector," he said. "We're seeing a lot of investors rotate into financials right now for value reasons and also for yield, but within financials, I think the key really is to identify the best companies."

To do that, Tepper looks for healthy free cash flow, growth potential and dividend yield. Two particular stocks — both of which have bigger payouts than the 10-year Treasury — stood out to him.


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