Long-term interest rates have awoken. The trend toward higher Treasury yields is likely just getting started, which makes 2021 an “inflection year” for us income investors.
And what better way to celebrate the paradigm shift than to buy dividend payers that are likely to double (or better!) in the months and years ahead?
Sure, some fixed-income plays are going to be punished. That’s a topic for another time. Today, we should focus on shareholder-yield darlings that see their profits increase in an outsized manner when interest rates climb.
I’m talking about stocks that will shower us with:
- Current yields today,
- Dividend raises tomorrow,
- Generous stock buybacks, and (most importantly)
- Share prices that will climb dramatically.