One thing is certain already: the market environment for 2022 will not be the same as that in 2021. This may or may not be good for investors, per se, but like every shift in market conditions, it will present opportunities for those prepared to grasp them.
Some factors are just reruns. COVID is rearing its ugly head again, threatening us with lockdowns and shutdowns. That’s running against the grain of a resurgent economy, an economy that is trying to gain more traction – but it’s facing headwinds in a shaky labor market. Even though unemployment is back down below 4%, the labor force participation rate is still too low and December saw less than half the expected jobs gains. And to top this off, inflation is still rising and the Administration wants to push more multi-trillion dollar spending packages.
It’s in this environment that Morgan Stanley’s chief cross-asset strategist, Andrew Sheets, has two important insights. First, he notes, “…that global growth has become less sensitive to each subsequent COVID wave as vaccination rates have risen, treatment options have improved and the appetite for restrictions has declined.” And second, “…it would seem for the moment that central banks in a lot of countries are increasingly comfortable pushing a more hawkish line until something pushes back. And so far, nothing has.”
Now that’s a positive spin for an uncertain time, and it has led Sheets’ colleague and Morgan Stanley stock analyst Robert Kad to pick out a number of high-yield dividend stocks as potential winners for the coming year. We’ve used the TipRanks database to select two of his picks for a closer look. These are stocks with a ‘double whammy’ when it comes to dividend payers: a high yield, in this case, 6% or better, along with better than 25% upside potential. Let’s dive into he details.
Energy Transfer (ET)
First up is Energy Transfer, a midstream company in the oil and gas sector. Midstreamers are vital components of the hydrocarbon industry, moving the crude oil, natural gas, and natural gas liquids from the wellheads…