Wall Street has remained volatile since the beginning of this year, with multiple factors denting investors’ sentiment. An unexpected surge in inflation, uncertainty over the Federal Reserve’s future rate cuts, and fears of a trade war owing to President Donald Trump’s new tariffs on steel and aluminum exports have been rattling stocks.
Given this uncertainty, cautious investors looking for a steady income and ways to protect their capital may want to hold or buy dividend-paying stocks. Three such stocks are Radian Group Inc. RDN, Urban Edge Properties UE and Middlefield Banc Corp. MBCN.
On Wednesday, the Bureau of Labor Statistics reported that the consumer price index (CPI) rose 0.5% month over month in January after rising 0.4% in December. January’s jump is the highest level since August 2023 and sharply above economists’ expectations of a rise of 0.3%. Year over year, CPI rose 3% in January, the biggest gain since June 2024.
Inflation declined sharply in 2024 after the Federal Reserve implemented its monetary tightening campaign. However, higher food and shelter costs have been a major challenge. Inflation has risen over the past three months, raising uncertainty over the Fed’s future rate cuts.
The Federal Reserve earlier hinted at fewer rate cuts this year and left its benchmark policy rate unchanged in its current range of 4.25-4.5% in its January policy meeting. Market participants had highly anticipated this and were prepared for the next rate cut to take place not before May.
However, a May rate cut, too, now looks uncertain and experts believe that the Federal Reserve may settle for just one 25 basis point rate cut in 2025 unless inflation shows signs of a sharp decline in the near term.
Investors are also reeling under trade war fears. Earlier this month, Trump suspended 25% tariffs on Canadian and Mexican imports till March. However, he imposed 10% tariffs on Chinese goods, which went into effect this month. China has also announced retaliatory tariffs. Experts believe that once the tariffs on Mexican and Canadian goods come into effect, inflation will surge further.
Trump has also announced tariffs on all steel and aluminum exports, which could keep markets volatile for a longer period.
Given the present circumstances, investing in stocks that pay dividends could be a smart choice. Such companies usually remain stable, consistently distributing dividends while sustaining profitability through strong business strategies. In a fluctuating market, companies that provide significant dividend payments often outperform those that do not.
Radian Group Inc. is a credit enhancement company that supports homebuyers, mortgage lenders, loan servicers and investors with a suite of private mortgage insurance and related risk-management products and services. RDN presently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
On Feb. 12, Radian Group announced that its shareholders would receive a dividend of $0.26 a share on Mar. 11. RDN has a dividend yield of 3.01%. Over the past five years, Radian Grouphas increased its dividend five times, and its payout ratio at present sits at 24% of earnings. Check Hanmi Radian Group’s dividend history here.
Urban Edge Properties is a real estate investment trust that acquires, develops, owns, manages and improves shopping centers in and on the edge of urban communities. UE presently has a Zacks Rank #2.
On Feb. 11, Urban Edge Properties declared that its shareholders would receive a dividend of $0.19 a share on Mar. 21. UE has a dividend yield of 3.28%. Over the past five years, Urban Edge Properties has increased its dividend four times, and its payout ratio at present sits at 52% of earnings. Check Urban Edge Properties’ dividend history here.
Middlefield Banc Corp. is a bank holding company for The Middlefield Banking Company. MBCN offers its customers a broad range of banking services, including checking, savings, and negotiable order of withdrawal (NOW) accounts, money market accounts, time certificates of deposit, commercial loans, real estate loans, and various types of consumer loans; safe deposit facilities, and traveller's checks. MBCN presently carries a Zacks Rank #2.
On Feb. 10, Middlefield Banc Corp announced that its shareholders would receive a dividend of $0.21 a share on March 14. MBCN has a dividend yield of 3.10%. Over the past five years, Middlefield Banc Corp has increased its dividend five times, and its payout ratio at present sits at 42% of earnings. Check Middlefield Banc Corp’s dividend history here.
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