Part of the reason for this is a dearth of yield from most investment-grade bonds, motivated by a decade of Federal Reserve overnight rates that are negative in inflation-adjusted terms. And those ultra-low rates aren’t going away anytime soon, according to Federal Reserve Chairman Jerome Powell.
“We think that the economy’s going to need low interest rates, which support economic activity for an extended period of time — it will be measured in years,” he said at a recent press conference.
So in this economy, where bonds aren’t even paying enough to be useful as a parking spot for money, what’s a conservative or income-oriented investor to do?
Many have been turning to a different kind of asset — one which offers far higher yields and capital gains than bonds, but which theoretically carries more risk…
Are Dividend Stocks Better? Depends On Which Ones
In this environment, many asset managers, like RNC Genter Capital Management’s Dan Genter, are moving their income-oriented clients into dividend stocks. Genter called dividend stocks “one of the few games in town” for income-oriented investors in a recent interview with MarketWatch’s Philip van Doorn.
Indeed, many dividend stocks currently offer yields that should exceed Treasury yields for years to come, if they can maintain their payouts.
And that’s easier said than done. 2020 was a rough year for bonds, but it wasn’t especially kind to every dividend stock, either. Dozens of previously-reliable players — including longtime income investor darlings like Disney (NYSE: DIS) — cut or paused their payouts during the pandemic.
Others, however, didn’t. In this report, we’re looking at a select group of eight dividend stocks with multi-decade track records of consecutive annual dividend increases which have continued through the pandemic.
These stocks are also extremely unlikely to cut their dividends anytime soon — because their payouts account for less than half of their earnings per share (EPS), and because their EPS is still growing on a year-over-year basis.
Best of all, each of these eight stocks has a yield far higher than that of the 10-year Treasury…
Founded in 1955 and based in Columbus, Georgia, Aflac is the largest supplemental insurance provider in the U.S.
The company acted quickly on early warnings from its Asian subsidiaries about the seriousness of COVID-19, and was thus among the first financial services firms to shift to a remote work model.
As a result, its operations have continued largely uninterrupted through the pandemic, and its stock has risen to new heights in the last year…