Time Warner Cable Inc (TWC), The Boeing Company (BA), Oneok Partners LP (OKS): You Should Keep Your Eyes Focused on Credit

Bottom line

The main idea behind my proposition is that bond-like stocks (low expected growth but high dividend yields) represent a risk as bond yields rise. Why would you hold a company with low expected top-line growth if you could get a comparable return by investing in high grade bonds? That said, there are some opportunities that arise as yields go up. Companies such as The Boeing Company (NYSE:BA) or Caterpillar Inc. (NYSE:CAT) will not only benefit as the US economy improves. They will also benefit since their future long term obligations (pension obligations), which are huge, can be discounted at higher rates. Yields are rising–your portfolio should be prepared.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool recommends Oneok Partners LP (NYSE:OKS).

The article You Should Keep Your Eyes Focused on Credit originally appeared on Fool.com.

Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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