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These 20 Stocks Could Benefit From Higher Rates

The current problem on the market could be descried with the following sentence: Rising rates could let to a falling dollar. 

In contraction, Investors expect the US Dollar to rally, undermining equities and furthering headwinds to S&P 500 EPS and also amplified stress for EM borrowers (USD denom. debt). 

History says that the consensus is wrong and counters intuitively, when the Fed moves to neutral from easy (11 most recent cycles), USD weakened 55% of the time, with a median decline of 7% in the first year.

Below I've implemented screen results of stocks that might benefit from rising rate hikes. Stocks from the screen have fulfilled the following criteria:

Stock selection criteria...

(i) Stock’s price correlation to the USD (DXY Index) from 5/2014 – 3/2015 is less than -0.40

(ii) Mean implied upside based on analyst target prices is positive

(iii) P/E (‘15E and ‘16E) is below 25X but consensus EPS is positive

(iv) FCF yield is above 3%

(v) Company beat consensus EPS expectations the last 2 quarters.


Here are the 20 best yielding results in detail....

National-Oilwell Varco -- Yield: 5.05%

National-Oilwell Varco (NYSE:NOV) employs 54,540 people, generates revenue of $21,440.00 million and has a net income of $2,455.00 million. The current market capitalization stands at $13.69 billion.

NOV increased dividends 4 out of the last 4 years. In 2014 the dividend yield was 2.3%. Dividend distributions were in March, June, September and December. The dividend payout ratio is 24%. In the last 10 years, the stock had an annual compounded return of 16.2% including dividends and stock price appreciation. This is 10.7% higher than the S&P 500 return of 5.4%. The company operates in the Basic Materials sector. 

National-Oilwell Varco’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,496.00 million. The EBITDA margin is 20.97% (the operating margin is 16.85% and the net profit margin 11.45%).

Financials: The total debt represents 9.43% of National-Oilwell Varco assets and the total debt in relation to the equity amounts to 15.30%. Due to the financial situation, a return on equity of 11.42% was realized by National-Oilwell Varco.

Twelve trailing months earnings per share reached a value of $4.51. Last fiscal year, National-Oilwell Varco paid $1.64 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.35, the P/S ratio is 0.64 and the P/B ratio is finally 0.74. The dividend yield amounts to 5.05%.

Stock Charts:

Long-Term Stock Price Chart of National-Oilwell Varco (NOV)
Long-Term Stock Price Chart of National-Oilwell Varco (NOV)
Long-Term Dividend Payment History of National-Oilwell Varco (NOV)
Long-Term Dividend Payment History of National-Oilwell Varco (NOV)
Long-Term Dividend Yield History of National-Oilwell Varco (NOV)
Long-Term Dividend Yield History of National-Oilwell Varco (NOV)


Dow Chemical -- Yield: 3.61%

Dow Chemical (NYSE:DOW) employs 51,635 people, generates revenue of $58,167.00 million and has a net income of $3,839.00 million. The current market capitalization stands at $58.97 billion.

DOW increased dividends 26 out of the last 41 years. In 2014 the dividend yield was 3.6%. Dividend distributions were in March, June, September and December. The dividend payout ratio is 48%. In the last 10 years, the stock had an annual compounded return of 2.7% including dividends and stock price appreciation. This is 2.7% lower than the S&P 500 return of 5.4%. The company operates in the Basic Materials sector.

Dow Chemical’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,891.00 million. The EBITDA margin is 13.57% (the operating margin is 9.22% and the net profit margin 6.60%).

Financials: The total debt represents 28.76% of Dow Chemical assets and the total debt in relation to the equity amounts to 88.23%. Due to the financial situation, a return on equity of 16.48% was realized by Dow Chemical.

Twelve trailing months earnings per share reached a value of $3.66. Last fiscal year, Dow Chemical paid $1.53 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.11, the P/S ratio is 1.01 and the P/B ratio is finally 3.20. The dividend yield amounts to 3.61%.

Stock Charts:

Long-Term Stock Price Chart of Dow Chemical (DOW)
Long-Term Stock Price Chart of Dow Chemical (DOW)
Long-Term Dividend Payment History of Dow Chemical (DOW)
Long-Term Dividend Payment History of Dow Chemical (DOW)
Long-Term Dividend Yield History of Dow Chemical (DOW)
Long-Term Dividend Yield History of Dow Chemical (DOW)


Nucor Corporation -- Yield: 3.52%

Nucor Corporation (NYSE:NUE) employs 23,600 people, generates revenue of $21,105.14 million and has a net income of $815.79 million. The current market capitalization stands at $13.52 billion.

NUE increased dividends 28 out of the last 30 years. In 2014 the dividend yield was 2.9%. Dividend distributions were in March, June, September and December. The dividend payout ratio is 70%. In the last 10 years, the stock had an annual compounded return of 10% including dividends and stock price appreciation. This is 4.6% higher than the S&P 500 return of 5.4%. The company operates in the Basic Materials sector.

Nucor Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,082.66 million. The EBITDA margin is 9.87% (the operating margin is 6.44% and the net profit margin 3.87%).

Financials: The total debt represents 30.05% of Nucor Corporation assets and the total debt in relation to the equity amounts to 60.37%. Due to the financial situation, a return on equity of 9.23% was realized by Nucor Corporation.

Twelve trailing months earnings per share reached a value of $2.02. Last fiscal year, Nucor Corporation paid $1.48 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.98, the P/S ratio is 0.64 and the P/B ratio is finally 1.74. The dividend yield amounts to 3.52%.

Stock Charts:

Long-Term Stock Price Chart of Nucor Corporation (NUE)
Long-Term Stock Price Chart of Nucor Corporation (NUE)
Long-Term Dividend Payment History of Nucor Corporation (NUE)
Long-Term Dividend Payment History of Nucor Corporation (NUE)
Long-Term Dividend Yield History of Nucor Corporation (NUE)
Long-Term Dividend Yield History of Nucor Corporation (NUE)


LyondellBasell Industries -- Yield: 3.39%

LyondellBasell Industries (NYSE:LYB) employs 13,100 people, generates revenue of $45,608.00 million and has a net income of $4,172.00 million. The current market capitalization stands at $41.35 billion.

LYB increased dividends 1 out of the last 2 years. In 2014 the dividend yield was 3.5%. Dividend distributions were in February, April, August and November. The dividend payout ratio is 31%. In the last 3 years, the stock had an annual compounded return of 41.5% including dividends and stock price appreciation. This is 23.7% higher than the S&P 500 return of 17.9%. The company operates in the Basic Materials sector. 

LyondellBasell Industries’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6,749.00 million. The EBITDA margin is 14.80% (the operating margin is 12.46% and the net profit margin 9.15%).

Financials: The total debt represents 29.27% of LyondellBasell Industries assets and the total debt in relation to the equity amounts to 85.48%. Due to the financial situation, a return on equity of 40.07% was realized by LyondellBasell Industries.

Twelve trailing months earnings per share reached a value of $9.40. Last fiscal year, LyondellBasell Industries paid $2.70 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.89, the P/S ratio is 0.91 and the P/B ratio is finally 5.39. The dividend yield amounts to 3.39%.

Stock Charts:

Long-Term Stock Price Chart of LyondellBasell Industries (LYB)
Long-Term Stock Price Chart of LyondellBasell Industries (LYB)
Long-Term Dividend Payment History of LyondellBasell Industries (LYB)
Long-Term Dividend Payment History of LyondellBasell Industries (LYB)
Long-Term Dividend Yield History of LyondellBasell Industries (LYB)
Long-Term Dividend Yield History of LyondellBasell Industries (LYB)


QUALCOMM -- Yield: 3.20%

QUALCOMM (NASDAQ:QCOM) employs 31,300 people, generates revenue of $26,487.00 million and has a net income of $7,534.00 million. The current market capitalization stands at $94.27 billion.

QCOM increased dividends 11 out of the last 15 years. In 2014 the dividend yield was 2.2%. Dividend distributions were in March, June, August and November. The dividend payout ratio is 33%. In the last 10 years, the stock had an annual compounded return of 7.4% including dividends and stock price appreciation. This is 2% higher than the S&P 500 return of 5.4%. The company operates in the Technology sector. 

QUALCOMM’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9,008.00 million. The EBITDA margin is 34.01% (the operating margin is 27.84% and the net profit margin 28.44%).

Financials: The total debt represents 0.00% of QUALCOMM assets and the total debt in relation to the equity amounts to 0.00%. Due to the financial situation, a return on equity of 20.03% was realized by QUALCOMM.

Twelve trailing months earnings per share reached a value of $3.64. Last fiscal year, QUALCOMM paid $1.54 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.31, the P/S ratio is 3.56 and the P/B ratio is finally 2.56. The dividend yield amounts to 3.20%.

Stock Charts:

Long-Term Stock Price Chart of QUALCOMM (QCOM)
Long-Term Stock Price Chart of QUALCOMM (QCOM)
Long-Term Dividend Payment History of QUALCOMM (QCOM)
Long-Term Dividend Payment History of QUALCOMM (QCOM)
Long-Term Dividend Yield History of QUALCOMM (QCOM)
Long-Term Dividend Yield History of QUALCOMM (QCOM)


General Electric -- Yield: 3.14%

General Electric (NYSE:GE) employs 305,000 people, generates revenue of $148,589.00 million and has a net income of $15,457.00 million. The current market capitalization stands at $296.23 billion.

GE increased dividends 45 out of the last 51 years. In 2014 the dividend yield was 3.3%. Dividend distributions were in February, June, September and December. The dividend payout ratio is 68%. In the last 10 years, the stock had an annual compounded return of -0.1% including dividends and stock price appreciation. This is 5.6% lower than the S&P 500 return of 5.4%. The company operates in the Industrial Goods sector. 

General Electric’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29,386.00 million. The EBITDA margin is 19.78% (the operating margin is 12.33% and the net profit margin 10.40%).

Financials: The total debt represents 48.00% of General Electric assets and the total debt in relation to the equity amounts to 244.70%. Due to the financial situation, a return on equity of 11.84% was realized by General Electric.

Twelve trailing months earnings per share reached a value of $0.31. Last fiscal year, General Electric paid $0.89 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 93.78, the P/S ratio is 1.99 and the P/B ratio is finally 2.30. The dividend yield amounts to 3.14%.

Stock Charts:

Long-Term Stock Price Chart of General Electric (GE)
Long-Term Stock Price Chart of General Electric (GE)
Long-Term Dividend Payment History of General Electric (GE)
Long-Term Dividend Payment History of General Electric (GE)
Long-Term Dividend Yield History of General Electric (GE)
Long-Term Dividend Yield History of General Electric (GE)

Which Performance Generated These Stocks?




Portfolio Total Return: 99.7%
The above portfolio's total return (period was limited to 4/30/2010-9/30/2015 by LYB) was 99.7%, outperforming the SPDR S&P 500 ETF's total return of 80.3%.

Portfolio Volatility: 22.9%
The portfolio's volatility was 22.9% which was considerably higher than the S&P 500 volatility of 13%.

Portfolio Diversification: 
The portfolio's average correlation value is 0.64. 

In 2014, a $10,000 Portfolio Investment Generated $302 Dividend Income. The Total Return Negative. You Lost $1,500.




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