Investors believe dividend stocks are more profitable

As the Federal Reserve approaches its ultimate stopping point, investors are reevaluating dividend-rich stocks.

The Fed’s aggressive rate rises have pushed short-term Treasury yields above 5%, their highest level since 2007.

This has put pressure on many dividend-paying stocks, which investors preferred when rates were lower.

Some investors believe dividend payers are starting to appear tempting again as they hunt for income if Treasury yields fall, betting the Fed won’t raise rates much further.

The $11.7 billion ProShares S&P 500 Dividend Aristocrats ETF saw $33 million in net inflows over the two weeks ending July 19, suggesting a resurgence in dividend-paying stocks.

S&P Dow Jones Indices’ senior index analyst, product management, believes that a soft landing will boost finance and energy equities.

Dividend payers also benefit from the market’s expanding recovery from the cluster of giant tech and growth stocks that led advances for most of the year.


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