Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
Bank of America (BAC)
Bank of America is a $295 billion financial holding company, with a leading U.S. and global footprint.
Generally speaking, the banking business is positively impacted by rising interest rates. When rates increase, the spread between what banks charge in interest and what they pay out widens.
Bank of America has a high proportion of its assets in low-cost consumer deposits relative to peers. In other words, rising interest rates should benefit Bank of America to a greater degree than many of its competitors. Conservative underwriting and a measured risk-taking appetite should also help the bank take advantage of its scale and opportunities in a responsible way.
The bank is enjoying resilient consumer and strong lending markets. Over the past few quarters, earnings have come in better than expected.
Bank of America shares are down 20% so far in 2022. Rapidly rising rates could serve as a powerful turnaround catalyst.
Contemporary art has outperformed the S&P 500 by 131% for the past 26 years. Join the exclusive platform to invest in million-dollar works by artists like Banksy, Basquiat, and more. Get started today and diversify your portfolio with art.
Learn MoreMerck (MRK)
Healthcare companies can also serve as a safe haven in a rising rate environment. Their resilient nature makes them relatively immune to the economic turbulence that higher rates can bring.
On top of that, the healthcare sector hasn’t exactly soared in recent years, so valuations are compelling.
Healthcare giant Merck — a $214 billion global healthcare company — represents a solid way to gain access to the sector. It has leading oncology and cardiovascular disease franchises.
2021 was a strong year for Merck. It posted revenue and EPS growth of 17% and 7.3%, respectively, due to strong operational momentum. Currently, the stock offers a dividend yield of 3.2%.
Cheniere Energy (LNG)
Cheniere Energy is the leading producer and exporter of liquefied natural gas in the U.S. Thanks to white-hot inflation, the company is benefiting from soaring natural gas prices. Since interest rates are tied to rising energy prices, Chenier looks like a particularly timely opportunity.
Cheniere is also enjoying a very favorable global supply/demand dynamic, which shows no signs of letting up. Last month, U.S. LNG exports rose 16% to a record high as European countries tried to cut down on Russian gas imports.
Record global LNG demand has resulted in record revenue, volumes and cash flow for Cheniere. The shares are up an impressive 36% in 2022.
Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
Acorns rounds your everyday purchases to the nearest dollar and invests your spare change. That means any spare change from your daily spending – gas, coffee or groceries – will go towards building your wealth. Get up to $20 when you sign up with this special link.
Get StartedMore from Moneywise
- Kevin O’Leary says ‘you’re actually losing money’ in a bank account — do this simple thing with your hard-earned cash instead
- Jim Rogers: Next bear market will be ‘worst in my lifetime’ — he'll rely on 3 assets
- Robert Kiyosaki says we're already in a 'technical depression' — he's using these 3 assets for protection
Sponsored
Meet Your Retirement Goals Effortlessly
The road to retirement may seem long, but with WiserAdvisor, you can find a trusted partner to guide you every step of the way
WiserAdvisor matches you with vetted financial advisors that offer personalized advice to help you to make the right choices, invest wisely, and secure the retirement you've always dreamed of. Start planning early, and get your retirement mapped out today.
