Best Dividend Stocks to Buy When Rates Rise

The quantitative researchers at Morgan Stanley are crunching numbers to figure out which dividend stocks are likely to do best when rates rise. It’s an important question now that some investors are shunning bonds in favor of stocks that yield just as much or more than the benchmark 10-year Treasury. But high dividends can be a sign of a weak equity performer or a slow grower — a stock investors buy mainly for the dividend yield, but then sell when bond rates perk up.

The analysts came up with a list of favored stocks for each cohort of dividend payers. But below is the favorite stocks with dividend yields close and below the 10-year yield: Hewlett-Packard (HPQ), Valero Energy (VLO), CSX Corp. (CSX), Archer-Daniels-Midland (ADM), Marathon Petroleum (MPC), Corning (GLW), Macy’s (M), Western Digital (WDC), Parker-Hannifin (PH) and Gap (GPS).

Source: Baron's

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