Dividend stocks may be safe in a volatile market, with plenty of income boosting like clockwork.
The stock market is now a good time, according to Goldman Sachs strategists.
In a note, investors should maintain their own equities with high dividend yields and growth. Dividend stocks currently trade at attractive valuations and have historically outperformed during periods of increased inflation.
This is a period of rising inflation, with consumer prices reaching 8.5 percent in the twelve months to March, bringing a 40-year high.
The economists have increased their dividend growth prediction for this year to 10%. They believe that earnings growth is the foundation for our dividend projection.
Dividend growth is expected to down by 4%, according to strategists. Earnings per share (EPS) increased by 47% in 2021, while dividends per share (DPS) increased by 4%.
According to experts, the combination of anticipated EPS growth of 5% in 2022 should lead to strong dividend growth this year.
Defining the Basket
The group is assembling a high dividend-growth basket. Each sector has over-average dividend yields, high projected DPS growth, along with moderate payout ratios, according to the strategists.
The following is a list of top names.
Get Omnicom Group Inc Report, an advertising/marketing company, at the OMC.
Get Whirlpool Corporation Report, a home appliance business;
Get Molson Coors Beverage Company Class B Report, a beer company;
Get the Pioneer Natural Resources Company Report, an oil producer, and get the Pioneer Natural Resources Company Report.
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Huntington Bancshares (HBAN) - Find a Bank''s Incorporated Report;
Get Merck & Co., Inc. Report, a drug company, at Merck (MRK);
Get United Parcel Service, Inc. Class B Report, a delivery company, at United Parcel Service (UPS);
Get Corning Inc Report, a specialty glass/ceramics company, at Corning (GLW);
Get Packaging Corporation of America Report, a corrugated packaging manufacturer, by packaging Corporation of America;
Get Simon Property Group, Inc. Report, a mall real estate investment trust; and Get Simon Property Group, Inc.
Get a NRG Energy, Inc. Report, a utility.
Dividends: A Positive View from BofA
Last month, Bank of America strategists explained why they are bullish on dividend stocks. A simple, edited list of them also includes:
1. In a year for which our S&P 500 objective implies the first year of losses since 2018, total return is crucial. Dividends have contributed 36% of total returns, according to the strategists.
2. Sectors that are positively linked to inflation, with rising yields, may be the best option in a time of still poor yields and inflation worries looming large. Note that the sectors that have outperformed this year are higher-yield inflation beneficiaries like energy and materials.
3. With interest rates rising, the market for stocks versus cash has decreased in comparison to previous years, according to analysts. Bird-in-the-hand stocks will likely continue to lead.
4. A high dividend rate has performed well during late cycle periods, where we still sit, according to officials.
The author of this novel owns a stock of UPS.