June 28, 2021
The low rate environment has been hard for bond market income investors. More and more of them, hunting for dividends, are turning to high-yielding stocks. There has been a surge in value-oriented strategies that were all but dead 6 months ago. Leading the back for top-yielding stocks with dividends in the 5-7% range are Altria, AT&T, Exxon Mobil, Chevron, Valero Energy, Phillip Morris Int., IBM, and Prudential Financial. These high-yielding dividend stocks are cheap compared to the S&P 500 aligning with popular value strategies. They also have dividends that outpace their own bond yields. Altria for example is trading at half the P/E ratios of leading consumer stocks and the overall market with a 7.5% dividend.
FINSUM + Magnifi: If there is market turmoil, bonds won’t provide the countercyclical hedge they normally do if it's caused by inflation. Volatility strategies can be a better hedge for your portfolio.
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