Dividend Stocks To Ride Out The Bond Squeeze

With bond valuations getting squeezed as the Federal Reserve keeps rates near zero, fixed-income yields have fallen under a considerable amount of pressure. Also, total returns for many corporate bonds risk not exceeding their coupon payments this year. So where should investors go hunting for yield outside of fixed income? Electric utilities, natural-gas-infrastructure companies, and real-estate investment trusts are good low-risk candidates, according to a recent report from Barclays. “Since QE2 began in November 2010, cyclical sector P/Es have contracted while defensive sector multiples have expanded,” Barclays wrote in the note. “In our view, this trend will persist until the Fed begins the normalization process, creating an accommodative environment for equity income.”

Of the firm’s many suggestions, MarketWatch picked the 10 largest by market cap: 1. Simon Property Group Inc. (SPG), 2. Kinder Morgan Inc. (KMI), 3. Duke Energy Corp. (DUK), 4. National Grid PLC (NGG), 5. Williams Cos. (WMB), 6. Prologis Inc. (PLD), 7. Plains All American Pipeline LP (PAA), 8. Boston Properties Inc. (BXP), 9. Northeast Utilities (NU) and 10. Oneok Inc. (OKE).

Source: MarketWatch

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