Interest rates

6 Warren Buffett Dividend Stocks That May Skyrocket as Interest Rates Rise Again – 24/7 Wall St.

If any investor has stood the test of time, it’s Warren Buffett. For years, “The Oracle of Omaha” has had a rock star presence in the investment world. His Berkshire Hathaway Annual Meeting of Shareholders literally attracts tens of thousands of loyal fans who are also investors. Known for his long buy and hold strategies and with a massive portfolio of public and private holdings, he remains one of the preeminent investors worldwide.

The Federal Reserve has declared its intention to have the federal funds rate at 4.75% to 5.00% by the end of the year, or early next year. Wednesday’s 75 basis point increase and another 50 basis point increase in December should bring us closer to the finish line, with another 50 basis points, or even more in 2023, still to come down.

This does not bode well for some stocks, such as utilities and real estate investment trusts. For financials, this means one thing: increased net interest income. Net interest income is a performance measure that reflects the difference between the income generated by a bank’s interest-bearing assets and the expenses associated with paying its interest-bearing liabilities. Assets likely to earn interest for banks can range from mortgages to auto, personal and commercial real estate loans.

We looked at Berkshire Hathaway’s portfolio for major banks and financial institutions and found six companies likely applauding the Federal Reserve’s hike in the federal funds rate. All six pay strong dividends and are rated Buy on Wall Street. It is important to remember that no single analyst report should be used as the sole basis for any buy or sell decision.

Allied Financial

Banking without buildings is poised for a very strong fourth quarter and 2023. Ally Financial Inc. (NYSE: ALLY) is a digital financial services company that provides various digital financial products and services to consumers, businesses and enterprises primarily in the United States and Canada.

Its Automotive Finance Operations segment provides automotive financing services, including retail installment contracts, loans and operating leases, dealership term loans, dealership floor plan financing and automotive financing. lines of credit to dealerships, warehouse lines to automotive retailers and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles and vehicle remarketing services.

The Insurance Operations segment offers financial protection and insurance products to consumers through the automotive dealership channel and commercial insurance products directly to dealerships. This segment provides vehicle service and maintenance contracts and guaranteed asset protection products, and underwrites commercial insurance coverages, which primarily insure dealer vehicle inventory.

The Mortgage Funding Operations segment manages a portfolio of consumer mortgages that includes wholesale purchases of high and low to moderate income mortgages issued by third parties, as well as direct-to-consumer mortgage offerings.

The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset based lending to middle market companies, leveraged lending and commercial real estate products to serve companies in the Health care. The company also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services. The company was previously known as GMAC and changed its name in May 2010.

Investors in Ally Financial shares receive a dividend of 4.34%. Citigroup has a target price of $34 and the consensus objective is $33.34. Wednesday’s close at $26.66 was down nearly 4% for the day.