Yielding a retirement-saving 14% with a rock solid business model and crystal clear cash flows, you may not find a better dividend paying stock in this market. And, as an added bonus this company’s profits will actually increase when the Fed hikes rates. This is a no-brainer investment in a market that’s starved for yield.

Although I don’t like to see falling share prices, last week’s stock market reaction to the strong Jobs Report numbers that increased the probability of a Fed interest rate hike in December, can only make me laugh. Companies with interest rate exposure have been expecting a rate increase for several years, and if management teams are smart they already implemented business plans that will let them thrive in a higher rate environment.

Share prices on many higher yield stocks have been declining for the last six months as market participants have worried about an interest rate increase. Then when economic data comes out that makes an actual rate increase pretty likely, the shares sell off another 3%, 4% or 5%. The illogical nature of the stock market becomes visible when you think about the effects of fear of a future event causing share prices to fall, and then when that future actually arrives, share prices are driven down further.

The market gives no thought to the fact that an interest rate increase is probably the most anticipated and discussed event in the current history of the markets and any effects of higher rates should have been priced into share values months ago ( if you believe in a rational market). Maybe we will actually get an up day for high yield stocks when the Fed finally announces a real interest rate increase.

As dividend focused investors, we need to understand how the individual companies function, and happily buy shares of the better companies at lower prices and higher yields. While the market has punished almost all higher yielding stocks because of interest rate fears eventually the dust will settle and the truth of which companies can perform and which cannot in the new higher rate environment will be evident. Today, I am going to focus on a small and little-known stock that will actually improve their profit margins as rates increase.