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

Allstate

Allstate (ALL) has been moving lower with the overall market over the last week, but the company will benefit from higher interest rates. All insurance companies generate a lot of interest income from investing customer premiums in short-term fixed assets until they are needed to payout claims, so higher rates will benefit companies in the sector, including Allstate. Allstate is forecast to grow its earnings by 22.4% during the current year, and looking ahead analysts expect average annual earnings growth of 14.7% over the next five years. The strong growth rates, combined with a low P/E of 10.9 suggests that there is a lot of upside to the stock, and the recent sell off creates a good buying opportunity. ALL is now trading at $91.22, and analysts have a $103.58 average price target on the stock.

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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.