Stocks have been rallying over the past two days as oil prices eased after the United States announced over the weekend that a peace deal had been reached with Iran, marking the end of the war.
A surge in oil prices since the beginning of the war earlier this year has seen inflation climb substantially over the past three months. This has made the Federal Reserve consider hiking interest rates in the near term. Although the war has ended, the recovery path won’t be that easy.
Amid the ongoing uncertainty, conservative investors seeking reliable income and looking for ways to protect their capital may want to consider holding or investing in dividend-paying stocks.
Such stocks provide steady earnings through regular dividend payouts and can help mitigate the effects of market volatility. Three such stocks are: Target Corporation TGT, National Fuel Gas Company NFG and Caterpillar Inc. CAT.
Volatility in Wall Street Continues
The Dow gained 328.64 points on Tuesday to close at 51,999.67 points. The blue-chip index earlier reached an all-time intra-day high of 52,190.29 points. The jump came as oil prices eased following the announcement by the United States on Sunday that a peace deal had been reached with Iran.
The peace deal marks the end of the months-long war that will see the reopening of the Strait of Hormuz, which will allow smooth passage to ships. This is likely to bring energy prices further down.
However, the picture isn’t that rosy, as the path to recovery won’t be that easy. Higher oil prices have led to a surge in prices of goods and services since the beginning of the war, pushing inflation higher.
Consumer Price Index (CPI) jumped 0.5% in May from the previous month after increasing 0.6% in April, the Commerce Department reported. On a year-over-year basis, CPI rose 4.2%, its biggest gain since April 2023.
The unexpected surge in inflation has made the Federal Reserve’s job even more challenging. Concerns have grown about the economy’s health as inflation remains far from the Fed’s 2% target. The central bank is now contemplating hiking interest rates in its bid to combat inflation.
3Stocks That Recently Announced Dividend Hikes
Target Corporation
Target Corporation has evolved from being a pure brick & mortar retailer to an omni-channel entity. TGT has been investing in technologies, improving websites and mobile apps, and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players. Target has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On June 11, Target Corporation announced that its shareholders would receive a dividend of $1.16 a share on Sept. 1. TGT has a dividend yield of 3.42%. Over the past five years, Target Corporation has increased its dividend six times, and its payout ratio presently sits at 57% of earnings. Check Target Corporation’s dividend history here.
National Fuel Gas Company
National Fuel Gas Company is an integrated energy company with natural gas assets in the Appalachian Basin and oil-producing assets in California. NFG has a Zacks Rank #3.
On June 11, National Fuel Gas Companydeclared that its shareholders would receive a dividend of $0.56 a share on Aug. 15. NFG has a dividend yield of 2.79%. Over the past five years, National Fuel Gas Companyhas increased its dividend six times, and its payout ratio presently sits at 28% of earnings. Check National Fuel Gas Company’s dividend history here.
Caterpillar
Caterpillar Inc. is the largest global construction and mining equipment manufacturer. Given that it serves a gamut of sectors — infrastructure, construction, mining, oil & gas and transportation, CAT is considered a bellwether of the global economy. Caterpillar has more than 4 million products with an extensive dealer network of 165 dealers spanning 191 countries. Caterpillar has a Zacks Rank #2 (Buy).
On June 10, Caterpillar announced that its shareholders would receive a dividend of $1.63 a share on Sept. 19. CAT has a dividend yield of 0.65%. Over the past five years, Caterpillar has increased its dividend six times, and its payout ratio presently sits at 30% of earnings. Check Caterpillar’s dividend history here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Caterpillar Inc. (CAT): Free Stock Analysis Report
Target Corporation (TGT): Free Stock Analysis Report
National Fuel Gas Company (NFG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).