Bond yields are surging , as markets get jittery on reignited fears that the U.S. Federal Reserve will keep interest rates higher for longer. The 2-year Treasury topped 5% for the first time since 2007 earlier this week and was trading around 5.0474% on Thursday, before last paring gains to 4.763%. The 10-year inched higher to trade around 3.9874%, but also dipped to 3.835%. Federal Reserve Chairman Jerome Powell on Tuesday cautioned that interest rates were likely to remain higher than expected. It drove stocks lower and bond yields higher (yields rise as prices fall). As rates surge, it becomes harder to find stocks that can compete on a yield basis — but some do exist. CNBC Pro used FactSet to screen for global stocks on the MSCI World index with yields above 5%. It comes after a CNBC Pro screen for U.S.-listed high-dividend payers earlier this week. The stocks on the global screen also have: Dividend-coverage ratios above 2, which indicates that the yields look relatively safe; Total debt-to-equity ratio less than 150%, with dividend payouts depending on factors including a company’s debt load; Buy ratings from at least 40% of analysts covering the stock. Two stocks stood out for having an over-20% dividend yield and being popular with analysts: French energy firm Engie and Hong Kong-listed shipping company SITC International Holdings . Engie had a buy rating from 73% of analysts, while SITC got 85% — the highest buy rating among the screened stocks. A few automakers, such as BMW and Stellantis , also made the list. Stellantis has a 10% dividend yield and a buy rating from 77% of analysts. It announced record full-year results in late February, reporting a 26% rise in net profit. The company also announced a 4.2 billion euro ($4.44 billion) dividend payout to shareholders equating to 1.34 euros per share, subject to shareholder approval. A number of REITS also made the list, such as U.S.-listed Medical Properties Trust and Singapore-listed CapitaLand Ascendas REIT , a business-space and industrial real estate investment trust. — CNBC’s Hakyung Kim and Elliot Smith contributed to this report.
Source link: https://www.cnbc.com/2023/03/10/as-treasury-yields-surge-these-global-stocks-have-yields-of-over-5percent.html