Rising Rates, Now Only A Few DJIA Stocks Out-Yield Longer Treasuries (TBT, KFT, MRK, PFE, T, VZ)

Banking, finance, and taxes

Published: December 16, 2010 11:01 am

Last Updated: April 3, 2020 3:58 pm

The longer-end of the curve is is still rising. Earlier we had seen the highest yields since June, and now we are seeing the highest yields since May. The 10-Year Treasury yield has broken the 3.50% barrier and is up at 3.54%, while the 30-Year Treasury Long Bond yield is now up at 4.60%. As yields keep rising, the ProShares UltraShort 20+ Year Treasury (NYSE: TBT) keeps rising as it is double-short the Barclays Capital 20+ Year U.S. Treasury Bond Index.

It was just back in August when we sounded the alerts that 20 of 30 DJIA stocks had higher payouts than the 10-Year Treasury, and 8 of the 30 DJIA components had a higher yield than the 30-Year long bond. While there are still some out-yielding the 10-year Treasury and the Long Bond, the list has shrunk considerably.

We now have only 5 of the 30 DJIA components with a higher dividend yield than the 10-Year Treasury and we have only two yielding more than the long bond:

Kraft Foods Inc. (NYSE: KFT) at $31.41 yields roughly 3.70% with its $1.16 annualized payout. Merck & Co. Inc. (NYSE: MRK) at $36.66 yields roughly 4.20% with its $1.52 annualized payout. Pfizer Inc. (NYSE: PFE) at $17.08 yields roughly 4.20% with its $0.72 annualized dividend but that is about to be higher at $0.80 per year and that new yield comes to almost 4.7%.

The only two which already yield more than the long bond are AT&T, Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). AT&T at $29.17 and the annualized $1.68 dividend comes to 5.7% for a dividend yield. Verizon is at $34.58 and the $1.95 annualized payout comes to 5.6% for a dividend yield.

If longer-dated Treasury yields rise too much, they will become real competition for income-oriented investors.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Credit Card Companies Are Doing Something Nuts

Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.

It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.

We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.