The bull market turns five-years old this year and many investors are looking to the exits. While strong M&A activity and the return of retail investors may support stock prices, weak sales growth could eventually drive shares lower. Dividend investors may want to avoid the traditional playbook of running for bonds and utilities and instead look to energy and basic materials for safe yield.
Investors may want to look to ideas from the business cycle for sectors that could perform well in the latter stages of the bull market but are not as negatively exposed to rising rates. During the latter stages of the business cycle, sales growth slows and inflationary pressures start to increase. The slower sales growth drives a build in inventory and profit margins come down. Strong balance sheets with solid outlooks: Agrium (AGU) is the largest agricultural retailer in the United States and one of the largest suppliers of nutrients in the world. Chevron (CVX) may be a $221 billion integrated oil company but its real advantage is in its upstream production business.
Source: Seeking Alpha
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