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Don’t fear rising interest rates, these stocks could soar as rates rise

BB&T Corp.

Regional banks are another sector that tend to benefit as interest rates rise. Banks like BB&T Corp. (BBT) have dealt with thin spreads on the money they loan out versus borrow as rates remained near-zero, but as interest rates start to rise, they will be able to widen the spread and generate higher interest income on the loans they make to their customers. With rates starting to rise in 2017, BBT shares moved higher, but the stock took a dip with the overall market correction. With the recent drop in share price, BBT looks attractive right now, with a P/E of just 19.2, and earnings forecast to rise by 40.9% during the current year, and by 7.0% per annum over the next five years. Of course, if we do see the Fed pick up the pace on interest rate hikes, the future earnings growth should be stronger than expected and drive shares higher. BBT is now trading at $52.58, with an average price target of $55.76

bbt180212

Chart courtesy of www.stockcharts.com

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Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.