The 10-year Treasury yield is above 5%, near its highest level in a quarter century and up from nearly 4% before the war with Iran began. The article compares how seven popular income stocks react to rate moves. Mortgage REITs AGNC (yield near 17%) and Annaly (over 16%) are the most sensitive: higher borrowing costs narrow their spreads, and their shares have fallen sharply, with Annaly more than 25% below its peak. Coca-Cola (yield about 2.3%) is largely insulated by long-term fixed-rate debt and pricing power, and its shares are up more than 30% this year. Energy Transfer (about 6.7%) and Enterprise Products Partners (about 6.1%) face higher borrowing costs partly offset by commodity-linked cash flows, while Realty Income (5.9%) is less rate-sensitive than mortgage REITs and Vici Properties yields about 7.9%.
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Original headline: When Interest Rates Move , These 7 Income Stocks React Very Differently
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The 10-year Treasury yield is now over 5%, near its highest level in a quarter century, up from about 4% before the war with Iran began. Mortgage REITs AGNC (yield near 17%) and Annaly (over 16%) are among the most rate-sensitive because they borrow short-term to fund long-term investments, and both shares have fallen sharply. Coca-Cola (about 2.3%) is far less sensitive, with mostly long-term fixed-rate debt and pricing power, and its shares have risen more than 30% this year. Energy Transfer (about 6.7%) and Enterprise Products Partners (about 6.1%) have mixed sensitivity, partly offset by higher oil and gas prices. Realty Income (5.9%) and VICI Properties (about 7.9%) are less rate-sensitive than mortgage REITs, and Realty Income mitigates its impact through private capital partnerships.
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