From The Motley Fool · Matt DiLallo · · 1m 20s
Interest Rates Shift 7 Income Stocks Differently
How rising rates impact income stocks varies wildly: mortgage REITs plummet while Coca-Cola rises.
In brief
How rising rates impact income stocks varies wildly: mortgage REITs plummet while Coca-Cola rises. Rising interest rates hurt mortgage REITs and REITs more than Coca-Cola, which has a strong balance sheet. Originally reported by The Motley Fool.
Interest Rates Move
Interest rates have moved sharply this year with the 10-year Treasury yield near 5%, up from 4% before the Iran war began.
AGNC Investment
AGNC Investment yields nearly 17%, down from 13% as rising rates narrow its income spread and boost Treasury appeal.
Annaly Capital Management
Annaly Capital Management yields over 16%, down more than 25% from peak due to rate sensitivity.
Coca-Cola
Coca-Cola yields around 2.3%, rising over 30% as its fortress balance sheet and pricing power insulate it from rates.
Energy Transfer
Energy Transfer yields around 6.7%, down over 7% as higher rates pressure its market value but energy prices boost cash flows.
Enterprise Products Partners
Enterprise Products Partners yields around 6.1%, down over 7% as oil prices offset higher borrowing costs.
Realty Income
Realty Income yields 5.9%, down over 15% as higher rates increase borrowing costs but private partnerships mitigate impact.
Vici Properties
Vici Properties yields around 7.9%, down nearly 25% as tenant issues and weaker balance sheet pressure its stock.
The essence
Rising interest rates hurt mortgage REITs and REITs more than Coca-Cola, which has a strong balance sheet.
