DIV - DIV: A High-Risk Energy Bet

2024-02-07 01:33:02 ET

Summary

• High-dividend US stocks have fallen out of favor, with the Global X SuperDividend U.S. ETF down 24% relative to the S&P 500 YoY.
• DIV's poor absolute and relative performance, risky portfolio allocation, and low earnings quality make it unattractive, though its low P/E suggests pessimism is priced in.
• Seasonal trends and technical indicators suggest that now is not an ideal time to invest in DIV.
• I outline key price levels to monitor during this often-bearish calendar stretch.

High-dividend US stocks have fallen completely out of favor in the last few months. The Global X SuperDividend U.S. ETF (DIV) is down 8% in its total return over the past 12 months, but relative to the growth-heavy S&P 500, DIV is down a whopping 24%. That underperformance has accelerated since the market's low last October. The SPX and DIV were about even from early February 2023 to that point, but AI fever and concentrated stock market appreciation are back en vogue....

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