Believe it or not, dividends were once the primary lure for the stock market as a whole...
The Sleeping Giant Awakens
By Marc Gerstein, director of research, Chaikin Analytics
Believe it or not, dividends were once the primary lure for the stock market as a whole...
American industrialist John D. Rockefeller is purported to have said, "Do you know the only thing that gives me pleasure? It's to see my dividends coming in."
These days, that type of thinking comes across as quaint. Most investors would rather put their money into high-flying growth stocks. They're looking for big, quick gains.
As you'll see today, the reality around dividends is nuanced. In modern history, investors who focus on dividends have done well by some measures and poorly by others.
But right now, this "sleeping giant" is starting to wake up again...
The senior analyst behind 24 different triple-digit winning recommendations (as high as 849%) just gave what he calls the most important interview of his LIFE. He thinks the market could be on the verge of an 80% collapse. He lays out all the proof... plus a detailed plan for exactly what to do. (And it does NOT require shorting... options... or anything speculative.) You must see this interview today.
I never worry about my retirement income, no matter what happens with politics or the markets. I've got legal obligations on my money. Now, a once-in-a-generation opportunity to see 700%-plus potential in my favorite strategy just opened again. I explain everything right here.
Let's start with the iShares Select Dividend Fund (DVY)...
DVY debuted on November 7, 2003. It's the oldest dividend-focused exchange-traded fund ("ETF") in the market. And since inception, its total return (stock gains plus dividends paid) is more than 360%.
For income seekers, DVY has reigned supreme over bonds in that span. The total return of the iShares IBoxx Investment Grade Corporate Bond Fund (LQD) is only 140% since then.
Of course, investors had many opportunities to beat DVY over the past two decades...
Since DVY's launch, the total return of the SPDR S&P 500 Fund (SPY) – an ETF that tracks the benchmark S&P 500 Index – is roughly 485%. And the sexier, tech-oriented Invesco QQQ Trust (QQQ) – which tracks the Nasdaq 100 Index – has returned around 1,010%.
However, things recently started to swing in favor of dividend stocks...
Our Power Gauge system currently ranks 683 U.S. equity ETFs. The table below lists the four largest dividend ETFs with "very bullish" rankings, as well as our comparison ETFs...
These dividend ETFs walloped the market over the past three months...
For example, you could've earned 11% from the First Trust Morningstar Dividend Leaders Index Fund (FDL). On the other hand, you could've lost roughly 11% in tech stocks with the Invesco QQQ Trust.
It's that simple.
And we're talking about beating tech stocks with a bask of companies that darn near any investor should want to own. Take a look at FDL's top 10 holdings...
Folks, the sleeping giant has awakened. Investors are seeking out stability with dividend-paying powerhouses. The reasoning behind this shift is pretty obvious...
Inflation was supposed to be resolved by now. And so were the COVID-19-spurred supply-chain issues. But the waning pandemic hasn't alleviated either of these pressures.
Now, a military conflict is happening in Europe. And even if it's resolved tomorrow, the effects will linger...
Russia is the world's top wheat producer. And Ukraine is in the top five.
The two countries are also responsible for a sizable portion of the world's nickel and palladium production. Those two metals are extremely important to the car industry.
Nickel is a key component of electric-car batteries. And palladium is essential in catalytic converters for the more traditional, gas-engine cars.
Simply put, the risk profile of the world – and by extension, investing – has changed in recent months. And when growth is uncertain, investors turn back to the basics.
Dividend-paying stocks continue to be the foundation of the market. And current global conditions mean that wise investors are taking notice of these stocks once again.
Now, dividend stocks are outperforming everything from the broad market to bonds to high-flying growth stocks. This isn't a fluke... The sleeping giant is awake again.
Good investing,
Marc Gerstein
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+1.75%
5
22
3
S&P 500
+1.83%
79
348
70
Nasdaq
+1.68%
9
71
18
Small Caps
+2.43%
0
0
0
Bonds
-3.42%
Financial
+2.62%
10
57
0
— According to the Chaikin Power Bar, Large Cap stocks are more than Small Cap stocks. Major indexes are mixed.
* * * *
Top Movers
Gainers
EPAM
+16.08%
HPE
+10.25%
LVS
+10.17%
PARA
+9.24%
WYNN
+8.56%
Losers
CHTR
-3.99%
ENPH
-3.93%
XRAY
-3.46%
SEDG
-3.13%
TWTR
-2.64%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
KR
BBY, BF.B
AVGO, COO, MRK
GPS
No earnings reporting today.
Earnings Surprises
SPLK Splunk Inc.
Q3
$0.66
Beat by $0.86
SNOW Snowflake Inc.
Q4
$0.12
Beat by $0.09
OKTA Okta, Inc.
Q4
$-0.18
Beat by $0.06
DLTR Dollar Tree, Inc.
Q4
$2.01
Beat by $0.24
VEEV Veeva Systems Inc.
Q3
$0.90
Beat by $0.02
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+7.81%
Discretionary
+5.61%
Industrials
+5.13%
Utilities
+4.81%
Information Technology
+4.76%
Real Estate
+4.09%
Communication
+3.92%
Health Care
+3.67%
Materials
+2.01%
Staples
+0.56%
Financial
-0.70%
* * * *
Industry Focus
Mining Services
20
10
2
Over the past 6 months, the Mining subsector (XME) has outperformed the S&P 500 by +26.27%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #5 of 21 subsectors and has moved up 2 slots over the past week.
Top Stocks
RS
Reliance Steel & Alu
SXC
SunCoke Energy, Inc.
CMC
Commercial Metals Co
* * * *
Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade.
The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities or any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the full disclaimer at https://www.chaikinanalytics.com/disclaimer.
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