2024-07-18 07:30:00 ET
Summary
- Dividend stocks are staging a comeback amid a broader market shift, offering promising opportunities for investors.
- Despite a top-heavy S&P 500, undervalued sectors are gaining momentum with strong fundamentals.
- Investors can capitalize on growth potential in defense, precious metals, and energy sectors poised for long-term gains.
Introduction
Guess what?
Dividend stocks are back!
After roughly 1.5 years of non-stop underperformance, dividend stocks are making a comeback, as displayed by the ratio between the Schwab U.S. Dividend Equity ETF ( SCHD ) and the S&P 500 below.
Although we're still dealing with green shoots, current momentum is promising and increasingly backed by favorable fundamentals, as we'll discuss in this article.
It's also an important development, as I have beaten the drum for a while on the importance of avoiding the top-heavy S&P 500 and finding value in undervalued areas instead. This includes a recent article titled " Forget Big Tech, 3 Terrific Dividend Growth Stocks To Buy," where I also wrote that a broadening market would offer tremendous opportunities:
While the market is far from cheap, my point is not that investors should dump their shares. My thesis is a broadening of strength, as I expect the equal-weight S&P 500 to outperform the market-weighted S&P 500.
Read the full article on Seeking Alpha
For further details see:
Dividends Are Back: 3 Massively Undervalued Dividend Growth Stocks Set To Soar