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Income Seeker

Income Seeker: FOMC Minutes Are Good News for Dividend Stocks and Some Bonds

By Income Seeker Team  | 2018-05-24 13:23:52.0
Stocks in Focus: FLRN, AMLP, DVY, BIZD

Income Seeker: FOMC Minutes Are Good News for Dividend Stocks and Some Bonds

By Peter Tchir

This week’s Federal Open Market Committee minutes support my view that we will have only one or two more rate hikes this year, then three or fewer next year.

That’s good for the floating-rate ETFs that I favor, like the SPDR Bloomberg Barclays Investment-Grade Floating Rate ETF (FLRN:NYSE) and the iShares Floating Rate Bond ETF (which trades on the BATS exchange under the ticker FLOT).

It’s also good news for short-duration bond funds, as the yield curve’s front end can rally. However, it’s not necessarily great for longer-dated U.S. Treasuries. The 10- year Treasury yield rallied Wednesday, but that had already broken 3% earlier on the hype surrounding Turkey’s currency woes.

I expect the yield curve to steepen now. The front end will outperform the long end, so I think it isn’t quite time to buy long-duration Treasuries.

That said, the FOMC minutes are unequivocally great news for dividend stocks -- which had been slowed by not only higher yields, but by a flatter curve as well. However, dividend stocks should now perform very well as the pressure comes off of the yield curve’s front end.

Some dividend-friendly plays that I like are the Alerian MLP ETF (AMLP:NYSE), the iShares Select Dividend ETF (DVY:Nasdaq) and the VanEck Vectors Business Development Company Income ETF (BIZD:NYSE).

My overall advice: Maintain an overweight on dividend stocks, or even grow your position if you can.

Income Seeker: Where to Look for Safety and High Yield
Stocks in Focus: SRLN, WFE.PRA, VRP

Advisers say investors seeking safety and a yield greater than 3% could consider senior floating-rate loans, fixed-to-floating preferred stocks.

05/23/18 - 07:45 AM EDT
Income Seeker: Assisted Care REIT You May Have Overlooked
Stocks in Focus: OHI, WELL, VTR, HCP, SNH, AMN

Chris Versace takes a look at Omega Healthcare Investors, a REIT specialized in skilled nursing and assisted living facilities.

05/22/18 - 11:28 AM EDT

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