Interest Sensitive Stock

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Interest Sensitive Stock

A stock whose value is likely to increase or decrease substantially due to changes in interest rates. Most interest sensitive stocks represent publicly-traded companies with high rates of long-term debt. These companies' stocks decrease in value when interest rates rise because the higher cost of borrowing may result in lower profits and dividends. Conversely, their stocks rise on lower interest rates. For this reason, utility companies tend to have interest sensitive stocks.
References in periodicals archive ?
And if there's a pause in rate hikes, Washington says interest-sensitive stocks such as banks, brokerages, and insurance companies should benefit.
During a climate of gradually improving growth prospects, interest-sensitive stocks like banks and investment companies usually perform strongly because of low and declining interest rates.
Banks suffer, but insurance, brokers and diversified financials perform in what would seem to be a market unfriendly to interest-sensitive stocks.
Interest-sensitive stocks like banks and brokerages usually under-perform amid rising interest rates.