2 Picks That Should Be At The Core Of A High-Yielding Portfolio

Core Viewpoint - The article emphasizes the attractiveness of high-yield investments, particularly British American Tobacco (BTI) and MPLX LP, as viable options for income-focused investors amid changing interest rate dynamics [3][6]. British American Tobacco (BTI) - BTI has a market capitalization of approximately $77 billion and offers a dividend yield of around 8.5$40 billion, provides a distribution yield of approximately 7.9%, supported by stable revenue from logistics and storage businesses [5]. - The adjusted EBITDA growth has outpaced periodic escalators at around 6.4%, driven by organic growth and M&A investments [5]. - MPLX's distributable cash flows (DCF) have increased significantly, with an annualized Q1 2024 DCF of about $5.3 billion, allowing for surplus liquidity after covering dividends and necessary investments [5]. Market Dynamics - The article notes a potential normalization of interest rates, which could lead to increased asset prices and reduced attractiveness of current dividend yields [6][7]. - Recent data indicates the possibility of interest rate cuts, contributing to a favorable environment for income-generating assets like REITs and bonds [7].