After the volatility of early 2022 and the aggressive rate tightening by the Fed, there’s a return of chatter about the “Great Rotation” – that is, a broad move among investors to reduce exposure to growth-oriented stocks and increase their positions in value stocks as well as bonds.
If you’re looking to change your portfolio allocation away from old growth darlings, you don’t have to dive back into the bond market. There are some high-yield stocks out there that offer payouts that are roughly double that of the typical S&P 500 SPX, -3.37% stock – and even better than the roughly 3.0% yield of 10-year Treasury notes TMUBMUSD10Y, 3.042%.
However, the lull didn’t last long. Strong results from its peers reinforced the notion of a tailwind for the sector driven by higher interest rates and strong lending. Furthermore, the suspension of stock buybacks wasn’t thanks to any bad behavior or shortfalls; rather, it is part of meeting expected higher regulatory capital requirements through 2024.What better way is there to play the broader tailwinds for the financial sector than with the largest bank in the U.S.
AbbVie Leading pharmaceutical stock AbbVie ABBV, -2.14% has admittedly lost some momentum from its 2022 highs. However, it’s still up on the year – and more importantly for income-oriented investors, pays more than double the yield of the S&P 500 at 4.0%. But if you’re only concerned with recent history, there’s still a lot to like in this dividend leader. The company has increased its dividend by more than 250% since its inception. And on the heels of a $63-billion acquisition of Allergan in 2020, industry research firm Evaluate Pharma has predicted AbbVie will become the largest pharmaceutical company by prescription drug sales by 2028.
Tapestry You may not think a retail-oriented stock is a particularly wise bet amid the market uncertainty and inflationary pressures. But high-end brands tend to be more resilient than down-market consumer companies, and Tapestry TPR, -3.86% commands a loyal base thanks to luxury nameplates that include Coach, Kate Spade and Stuart Weitzman.