5 Best Dividend Stocks For Rising Interest Rates

4. Bank of America Corporation (NYSE:BAC)

Dividend Yield as of January 19: 2.64%

Bank of America Corporation (NYSE:BAC) is a multinational investment bank and financial services company. In January, Citigroup raised its price target on the stock to $38 with a Neutral rating on the shares, following the company’s quarterly earnings. The firm also appreciated the company’s outperformance in Q4 2022.

In the fourth quarter of 2022, Bank of America Corporation (NYSE:BAC) reported revenue of $24.5 billion, which showed an 11.2% growth from the same period last year. The company is one of the best dividend stocks for higher interest rates because the yield on its current and future loans would increase due to interest rates hike.

Bank of America Corporation (NYSE:BAC) currently pays a quarterly dividend of $0.22 per share and has a dividend yield of 2.64%, as of January 19. The company holds a nine-year track record of consistent dividend growth.

At the end of Q3 2022, 97 hedge funds tracked by Insider Monkey owned investments in Bank of America Corporation (NYSE:BAC), worth over $35.6 billion collectively. Berkshire Hathaway was the company’s leading stakeholder in Q3.

Ariel Investments mentioned Bank of America Corporation (NYSE:BAC) in its third-quarter 2022 investor letter. Here is what the firm has to say:

“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”