FTDS - Dividend Payers Outperforming Broader Market

2024-05-13 15:10:00 ET

Summary

• With the 10-year U.S. Treasury yield approximately 4.5%, this represents competition for stocks if income is a focus for investors.
• Over the course of the last three months the S&P 500 Index utilities sector is up 19.3% followed by energy up 13.7% then materials up 10.8%.
• It isn't that dividend paying stocks won't go down when the market declines, but historically they have declined less, and this group of stocks has lagged the market over the last couple of years and investors may find opportunities with some of the dividend payers.

Much of the focus over the last year and a half has been on the strong performance of the so-called Magnificent 7 stocks, Meta Platforms (META), Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOGL) and Amazon (AMZN). There is no denying that these seven stocks have contributed an outsized percentage to the market's overall return. Over the last three months though, a number of the dividend strategies are now outperforming the S&P 500 Index as seen in the below chart. Not included in the chart, but the average total return of the Magnificent 7 stocks is also only 4.3%, lagging the equal-weighted S&P 500 Index and matching the total return of the cap-weighted S&P 500 Index....

For further details see: