At 6.4%, inflation is still uncomfortably high.
The inflation numbers for January showed a 0.5% month-over-month increase, and an annualized rate of 6.4%. Both numbers were higher than expectations for a 0.4% monthly rate, and a 6.2% year-over-year rate.
That being said, the Federal Reserve is more than likely to stick to raising interest rates to cool inflation. The same Federal Reserve that said inflation was merely transitory. It’s also likely the Fed will now raise interest rates in March and May, with markets anticipating a peak rate of about 5.25% this year. It’s not entirely surprising, though.
One way to do well with inflation at 6.4% is to buy high-yielding dividend stocks.
After all, companies with strong cash flows and attractive yields tend to outperform even the worst of markets. That being said, investors may want to keep an eye on dividend-paying stocks, such as:
Medical Properties Trust (MPW)
MPW yields 9.62% at the moment. It’s also one of the world’s largest owners of hospital real estate with 447 facilities and 44,000 beds in ten countries. Even better, it’s a solid defensive investment against market declines. After all, we need healthcare.
Altria Group (MO)
With a yield of 7.9%, MO could be another big runner on the year. Most recently, the company beat earnings and revenue estimates, and announced a new $1 billion buyback program. EPS came in at $1.18, beating expectations for $1.17. Sales did fall to $6.11 billion, but still beat expectations for $5.15 billion. For 2023, Altria said it expects full-year adjusted EPS to be between $4.98 and $5.13, or growth of 3% to 6% — all of which is in line with expectations.
Also, according to Barron’s, “Altria’s board has authorized a new $1 billion stock buyback program, to be completed by the end of 2023. That’s after completing its previous $3.5 billion share repurchase program, buying a total of $1.8 billion worth of stock last year.”
AFC Gamma Inc. (AFCG)
AFC Gamma, which yields 14%, provides financing, such as a mortgage and construction loans to help cannabis companies. A potential cannabis boom could make AFC Gamma attractive again.`
With more states and countries throughout Europe looking to legalize cannabis for recreational and medicinal purposes, related stocks could see higher highs. Plus, we have to consider that federal legalization may be possible sooner than later—especially with a large number of Americans in support of legalization.