High-yielding stocks are back in the spotlight as volatility persists, inflation remains hot and Treasury yields continue to rise. Data released last week showed that U.S. consumer inflation rose by 0.5% in January and was up 6.4% from a year ago — a larger-than-expected increase. Several Fed speakers hinted at further interest rate hikes after the data was released. “Inflation that is ‘too high’ according to a rash of hawkish speakers, alluding to not only more hikes being needed, but requiring rates to be elevated for a more prolonged period, means that a hawkish Fed is not a ‘breeze drifting on by,'” said Vishnu Varathan, head of economics and strategy at Mizuho Bank, in a Monday note. He also flagged that Treasury yields have risen materially since early February. So which companies might be a good bet in this environment? CNBC Pro screened the S & P 500 and the MSCI World on Factset for high-yielding stocks which are analyst favorites. The screen imposed the following criteria: A dividend yield of more than 5%; Potential upside to price target of more than 10%; Positive earnings-per-share growth expectations this year; A buy rating from at least 40% of analysts. A slew of energy names appeared on the screen, such as U.S.-based EOG Resources and Australia’s Origin Energy. Canadian firm Pembina Pipeline Corporation , as well as EOG Resources, offered high dividend yields at nearly 7% and almost 6% respectively. Both are also expected to have high earnings growth ahead, with forecasts of 146% for Pembina and 62% for EOG. Analysts also give EOG average potential upside of nearly 32%. As an added bonus, the energy sector, which outperformed the S & P 500 by 78% last year, could continue to have a good year in 2023. Several key factors are set to push up oil prices in the near future, according to analysts. U.K. bank NatWest Group stood out on the screen for firing on all cylinders: It has the highest yield on the list, at 12%, and a 65% buy rating from analysts, who give it more than 30% upside. It also has decent expected earnings growth of 33%. Hong Kong-listed shipping logistics firm SITC International Holdings also had a notably high dividend yield of 8.5% and nearly 60% potential upside.
