Most of the Fed followers expect the central bank to continue to raise rates by taking smaller baby steps in the first half of 2023, then pause for a while before lowering rates in the second half of 2023, explains Tony Sagami, editor at Weiss Daily Ratings.
Of course, nobody knows for sure, but everything depends on what happens to inflation. My expectation is that investors will be surprised by how fast inflation will fall.
House prices — and mortgage rates — have been falling, and rental prices have been falling even faster. So with inflation, housing costs, mortgage rates and rents all coming down, certain companies are posed to prosper.
Enact Holdings (ACT) — formerly Genworth Mortgage Holdings — is a private mortgage insurance (PMI) company. ACT is engaged in the business of writing and assuming residential mortgage guaranty insurance.
And for anyone who’s owned a home that they put less than a 20% down payment on, you know exactly what PMI is and how profitable a business it can be. Enact is one of those businesses. Since 1981, it’s been in the business of provided PMI.
Over the past year, despite the broad market nosediving, ACT managed a very respectable gain of 10.87% and is up 15.16% over the past six months. The company has a “B+” rating and pays an average-beating dividend yield of 2.32% — for the record, the S&P 500 paid 1.27% last year.
Icing the cake, the company’s price-to-earnings ratio is a ridiculously attractive 8.17, and last quarter it beat earnings per share expectations by 30 cents, coming in at $1.17/share.
InvestorsObserver rates Enact Holdings better than 92% of all stocks, and The Wall Street Journal gives ACT a one-year price target high of $30. And remember, the company will pay you a generous dividend yield in the meantime.
