With annual inflation in New Zealand expected around 4% to 4.2% and fuel costs surging, the gap between rising living costs and the returns on cash is back in focus for income investors. Higher inflation and the prospect of further Reserve Bank of New Zealand rate hikes can pressure equity valuations, but they also sharpen interest in stocks that already offer strong dividend metrics and robust balance sheets. This article looks at how that backdrop connects to our High Dividend Yield Stocks screener and reveals 3 dividend stocks directly exposed to these inflation and interest rate trends.

First Interstate BancSystem (FIBK)

Overview: First Interstate BancSystem is a community-focused bank holding company that offers everyday banking, lending, and wealth services to individuals, businesses, and municipalities across multiple US states. Through its First Interstate Bank network, it provides deposits, loans, trust and investment management, insurance, and digital banking to sectors ranging from agriculture and real estate to healthcare and tourism.

Operations: First Interstate BancSystem generates about US$1.0b of revenue from its Community Banking operations, all within the United States.

Market Cap: US$3.8b

Income investors looking at First Interstate BancSystem get a combination of a dividend yield around 4.7% and profitability with net profit margins near 30%, which may appeal when inflation is eroding cash returns. At the same time, earnings growth forecasts above 20% a year and recent EPS and net income strength sit alongside concerns around flat revenue expectations, insider selling, and asset quality pressures flagged in criticized loans. Management reshuffles and branch optimization add another layer of uncertainty. A key consideration is whether the bank’s capital position and focus on higher growth regions can support ongoing payouts and earnings in the face of these headwinds, and that is where investors may want to look closer.

First Interstate BancSystem’s earnings outlook and dividend yield could be pulling in different directions, so the real story may sit in the analyst forecasts for First Interstate BancSystem and what that implies for future payout resilience and risk.

Prosperity Bancshares (PB)

Overview: Prosperity Bancshares is a Houston based bank holding company for Prosperity Bank, offering everyday banking, loans, and wealth services to businesses and consumers, from home mortgages and commercial real estate lending to digital banking, cards, and trust and brokerage solutions.

Operations: Prosperity Bancshares generates about US$1.3b of revenue from its Banking segment, all within the United States.

Market Cap: US$7.3b

Prosperity Bancshares operates in a high inflation, higher rate backdrop as a regional bank that pairs a roughly 3.2% dividend yield with a long record of regular payouts and a focus on efficiency. Some income investors view this as a buffer when living costs and cash rates are moving around. Analysts expect revenue and earnings growth in the low 20% range over the next few years, helped by Texas focused expansion, recent mergers, and higher net interest income. However, that picture is complicated by rising loan losses, insider selling, and intense deposit competition in its core markets. Investors weighing the current valuation discount and analyst optimism against the asset quality and concentration risks may find Prosperity Bancshares worth a closer look.

Prosperity Bancshares sits at the intersection of Texas expansion, higher net interest income, and a valuation discount that some investors may be underestimating. Before the next rate move reshapes the story, review the analysis report for Prosperity Bancshares

First Hawaiian (FHB)

Overview: First Hawaiian is a long established bank holding company for First Hawaiian Bank, offering everyday banking, lending, credit cards, and wealth management services to households, small businesses, and larger commercial clients across its branch, online, and mobile channels in the United States.

Operations: First Hawaiian generates about US$624.8m from Retail Banking and US$243.3m from Commercial Banking, with only a small contribution from Corporate and Other activities.

Market Cap: US$3.5b

First Hawaiian stands out in the High Dividend Yield Stocks screener because it combines a consistent dividend, a net profit margin of 32.8%, and analyst expectations for revenue and earnings growth above 20% a year, together with conservative risk management and historically strong asset quality. The planned all stock acquisition of TriCo Bancshares would create a roughly US$34b asset bank with a broader California footprint and targeted cost savings. However, it also brings integration, credit, and geographic concentration risks that investors may wish to weigh carefully. With the stock trading below an estimated cash flow value and described as a defensive option during rising inflation and rate cycles, the key consideration is how this merger and growth plan could reshape First Hawaiian’s long term income and risk profile for shareholders.

First Hawaiian’s merger story, income profile, and risk discipline all intersect in a way many investors may be only partly pricing in, so the real hinge may be in the analyst forecasts for First Hawaiian and what that reveals about where the combined bank’s earnings power and dividend capacity could surprise or quietly disappoint.

The three stocks covered here are just a starting point, and the full High Dividend Yield Stocks screener has identified 10 more companies with similar income profiles and financial characteristics that may deserve a spot on your watchlist through the High Dividend Yield Stocks screener. Use Simply Wall St to identify and analyze the specific catalysts, balance sheet strength, and dividend narratives that matter to you, so you can focus on the highest conviction income ideas in minutes.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.