Because the resurgence of COVID-19 cases and rising inflation could precipitate a market correction in the near term, high dividend-paying stocks could be ideal bets to hedge against the potential investment portfolio losses. Analysts expect dividend-paying stocks Chevron (CVX), British American Tobacco (NYSE:BTI), and Sumitomo Mitsui (NYSE:SMFG) to rally by more than 15% in the near term. So, we think these stocks could be solid bets now. Let’s discuss.Concerns about the resurgence of COVID-19 cases and rising inflation are fueling significant volatility in the markets currently. In fact, many analysts and investors expect a broader market correction in the near term.
Given this backdrop, one of the ways to protect an investment portfolio against a potential loss could be adding fundamentally sound stocks that pay high dividends. Because the Fed is still committed to maintaining ultra-low benchmark interest rates, many stocks’ dividend yields look attractive compared to the yields of safer instruments.
Wall Street analysts expect high dividend-paying stocks Chevron Corporation (NYSE:CVX), British American Tobacco (BTI), and Sumitomo Mitsui Financial Group , Inc. (SMFG) to rally by more than 15% in price in the coming months. So, we think it could be wise to bet on these stocks.