Brookfield Stock And Other Rate Sensitive Picks For Higher Yield Watchlists

With talk of another Federal Reserve rate hike hanging over September and even October, and fresh inflation data due on August 12, short duration bond and fixed income ETFs are back in focus for anyone watching interest rate risk. This article looks at three stocks from that universe that sit close to the cross currents of rates, inflation and bond yields, and explains why their exposure to the latest news could matter for your portfolio.

The three stocks highlighted below are only a starting sample, since the full screen surfaced 38 more companies tied to short duration bond and fixed income themes that are not covered here but carry equally compelling narratives around balance sheet strength and interest rate exposure. To go beyond this short list, head straight into the Short-Duration Bond and Fixed Income ETFs screener to identify, filter and analyze the ideas that best fit your view on rates and risk.

Silvercrest Asset Management Group (SAMG)

Silvercrest Asset Management Group is a New York based wealth manager that focuses on ultra high net worth families, their trusts and institutions, providing investment management and family office services. The company generates about $125 million in revenue from investment management related activities in the United States. With a market cap of roughly $121 million, Silvercrest sits firmly in the smaller end of the wealth management peer group.

Investors watching the Fed and short duration bond yields may find Silvercrest Asset Management Group worth a closer look. The firm runs fixed income and short duration strategies for wealthy clients, which can become more appealing when higher rates put capital preservation and income back in the spotlight. At the same time, recent results show slim profit margins and pressure on earnings, plus a dividend that is not well covered, so the current income story comes with real questions. The mix of higher rate tailwinds for interest income and bond offerings, set against fee compression, higher expenses and reliance on external funding, creates a tension that could matter a lot for long term returns.

Silvercrest Asset Management Group sits at an interesting crossroads where higher rates could revive its fixed income appeal, while slim margins and dividend cover raise questions. Get the full story in the 2 key rewards and 2 important warning signs (1 is major!)

Build your own short duration income shortlist

Silvercrest Asset Management Group and the two other stocks in this article all came from a single screener, but the real value for you is in tailoring the search. Use our flexible Screener to mix filters like yield, balance sheet strength and fees, or tap into any of our curated Investing Ideas for ready made starting points.

Brookfield Asset Management (TSX:BAM)

Brookfield Asset Management is a New York based alternative asset manager that invests in real estate, infrastructure, renewable power, private equity and credit for institutions, pensions, sovereign wealth funds and wealthy individuals. The company runs public and private funds, listed partnerships and co investments, and has become one of the largest global managers of real assets. Brookfield Asset Management currently carries a market cap of about CA$116.9b.

Brookfield Asset Management sits at the crossroads of several themes that matter for income focused investors watching rates. Higher yields and volatile markets are creating stress for borrowers but also more attractive entry points for a well capitalized manager with large private credit and real asset platforms. At the same time, the stock trades on a rich P/E, the dividend is not well covered, and the balance sheet leans heavily on external borrowing, so this is not a simple low risk bond proxy. For investors who want exposure to fee based cash flows tied to long term infrastructure, renewable power and AI related build outs, Brookfield Asset Management offers a story that may warrant a closer look at both the potential upside and the financial pressure points.

Brookfield Asset Management’s fee driven cash flows and global real asset platform could be masking something important. See how the rich P/E, dividend cover and debt profile all fit together in the analysis report for Brookfield Asset Management

Moelis (MC)

Moelis is a New York based investment bank that advises companies, sponsors and governments on mergers and acquisitions, restructurings, recapitalizations and other capital markets moves across the Americas, Europe, the Middle East, Asia and Australia. The business is highly focused, with about US$1.6b of revenue coming from its investment banking advisory firm segment. Moelis has a market cap of roughly US$5.4b.

Moelis sits in an interesting spot for readers watching short duration bond and fixed income themes. Higher rates and bumpier credit conditions can create more restructuring, capital structure and fixed income related mandates. The firm is already reporting record pipelines and strong capital markets revenue. At the same time, Moelis carries an event driven revenue model, elevated compensation costs, insider selling and a dividend record that has not been consistently steady. For investors who want exposure to advisory fees that can benefit when volatility and bond market stress push clients to seek expert advice, Moelis is a stock that may deserve a closer look at both the opportunity and the trade offs that come with it.

Moelis’s event driven fee engine could be just getting started as restructurings and bond market stress pick up. Get the full story in the full narrative for Moelis

Seeking Fresh Alternatives Beyond Bonds?

Markets move fast and the best breakout stories rarely stay under the radar for long. Explore these fresh stock ideas before the momentum is fully established, then consider your options.

• Spot potential turnaround stories with real balance sheet strength by checking the curated list of solid balance sheet and fundamentals (48 results) while it still sits under the radar.
• Follow the early stages of AI infrastructure demand and track companies already building the backbone of that trend through the focused 56 AI infrastructure stocks before it attracts wider attention.
• Review the hand picked 89 nuclear energy infrastructure stocks to see companies that may benefit if a nuclear build out cycle develops, while valuations and expectations are still adjusting.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com