The U.S. economy is gripped by fears of an impending recession. Markets ended 2022 as the worst year since the 2008 economic meltdown and the Fed is still struggling to tame soaring inflation.
Although inflation has somewhat eased over the past couple of months, it is still at a 40-year high and remains the biggest threat to the American economy. This has seen the Fed implement steep rate hikes in 2022 and has indicated further hikes in 2023. Markets have been suffering as a result of this, with stocks getting battered almost every day.
Economic Uncertainty Continues
The Fed went for four consecutive 75-basis point rate increases in 2022 before wrapping the year with a slightly lower 50-basis point interest rate hike. The 50-basis point rate hike came as inflation showed some signs of easing and the Fed assured that it would go slow on its pace of rate hikes.
According to the latest data from the Labor Department, the consumer price index (CPI) in December declined to 6.5% from 7.1% in November. This is the smallest increase in over a year. Inflation fell by 0.1% in December on a month-over-month basis, following a 0.1% rise in November.
However, market participants feel that the recent CPI data won’t have much of an impact on the Fed’s plans to continue hiking rates. In fact, the Fed, too, made clear in its December meeting that it has no immediate plans to halt interest rate hikes, and rate hikes will continue in 2023 or at least till it manages to get a complete grip over soaring inflation.
Moreover, the surge in fresh COVID-19 cases and deaths in China has compelled Beijing to adopt lockdown measures, which has been unsettling markets. Additionally, the ongoing Russia-Ukraine conflict contributed to a wintertime global oil and gas crisis and has now resulted in supply-chain disruptions.
Along with all these, investors are now increasingly worried about how long the Fed will stick with its aggressive rate hike policy. Investors believe that trading will remain volatile and stocks will be under pressure until the Fed further slows down or halts its rate hikes.
Given these circumstances, an astute investor would make the decision to monitor dividend-paying equities at the moment. This is because dividend stocks, which have a successful track record and a sound business plan, can withstand market volatility.
They minimize the chances of price fluctuations in addition to providing a steady flow of profits. Additionally, dividend-paying equities have regularly outperformed non-dividend-paying firms during periods of market turmoil. Four such companies are Franco-Nevada Corporation FNV, Mercantile Bank Corporation MBWM, Apogee Enterprises, Inc. APOG andFirst Busey Corporation BUSE.
Franco-Nevada Corporation operates as a gold-focused royalty and stream company with additional interests in silver, platinum group metals, oil & gas and other resource assets. FNV has a diversified portfolio of 54 producing assets consisting of four larger cash-flowing assets — Antamina, Antapaccay, Candelaria and Cobre Panama and interests in 41 advanced assets (which are not yet producing) and interests in 223 exploration-stage mining properties. Franco-Nevada Corporationgenerates around 86% of revenues from the Americas (Latin America 49%, the United States 18% and Canada 19%) and 14% from the rest of the world
On Jan 17, Franco-Nevada Corporationdeclared that its shareholders would receive a dividend of $0.34 a share on Mar 30, 2023. FNV has a dividend yield of 0.89%. Over the past five years, Franco-Nevada Corporationhas increased its dividend six times and its payout ratio at present sits at 35% of earnings. Check Franco-Nevada Corporation’s dividend history here.
Mercantile Bank Corporation serves businesses and consumers across Grand Rapids and Kent County. MBWM offers a full range of mortgage, lending, deposit and checking products and services in a friendly, hometown banking environment.
On Jan 12, Mercantile Bank Corporation announced that its shareholders would receive a dividend of $0.33 a share on Mar 15, 2023. MBWM has a dividend yield of 3.85%. Over the past five years, Mercantile Bank Corporation has increased its dividend 10 times and its payout ratio at present sits at 37% of earnings. Check Mercantile Bank Corporation’s dividend history here.
Apogee Enterprises, Inc. is a leader in architectural products and services, providing architectural glass, aluminum framing systems and installation services for buildings as well as value-added glass and acrylic for custom picture framing and displays.
APOG operates under four segments, with three of the segments serving the commercial construction market. Apogee Enterprises has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On Jan 12, Apogee Enterprises declared that its shareholders would receive a dividend of $0.24 a share on Feb 15, 2023. AAPOG has a dividend yield of 1.94%. Over the past five years, Apogee Enterprises has increased its dividend six times and its payout ratio at present sits at 22% of earnings. Check Apogee Enterprises’ dividend history here.
First Busey Corporation is a financial holding company located in Urbana, IL. BUSE is engaged primarily in commercial, retail and correspondent banking, and provides trust services, insurance services and travel services.
On Jan 10, First Busey Corporation announced that its shareholders would receive a dividend of $0.24 a share on Jan 27, 2023. BUSE has a dividend yield of 3.83%. Over the past five years, First Busey Corporation has increased its dividend five times and its payout ratio at present sits at 40% of earnings. Check First Busey Corporation’s dividend history here.