Dividend stocks are a top inflation-fighting investment you want in your corner now

Investors are too quick to shun dividend-paying stocks when inflation worsens. That’s because they’re focusing on too short of a time horizon. When measured over at least several years, dividends historically have done an admirable job of keeping up with inflation.

This correlation would be even stronger if the past two decades were not included, since DPS growth rates have risen markedly in recent years as inflation receded. Those divergent trends are most likely an exception that proves the rule, since the divergence likely was caused by the growth in share-repurchase activity among dividend-paying companies. Other things being equal, repurchases cause dividends-per-share to rise faster than total dividends.

Consider the nine calendar years from the beginning of 1973 through the end of 1981, during which the CPI rose at an annualized rate of 9.2%. During that period, the 30% of stocks with the highest dividend yields produced an annualized return of 9.9%, according to data from Dartmouth College finance professor Ken French — or 0.7 of an annualized percentage point better than inflation.

Even if this high-yielding portfolio does not beat the market, it’s telling how much better it did than a second portfolio that included the 30% of stocks with the lowest yields. This low-yield portfolio produced a return of 5.0% annualized over this same period. Given that this second portfolio’s return was calculated in the same way as the high-dividend one, and given that their turnover rates should be similar, the spread between the two — 4.

MktwHulbert Dollars are worth less when monetary inflation is higher, and vice versa. Thus DPS is relatively stable throughout changes in inflation and depends more on other factors such as financial engineering or operational success.

ประเทศไทย ข่าวล่าสุด, ประเทศไทย หัวข้อข่าว

Similar News:คุณยังสามารถอ่านข่าวที่คล้ายกันนี้ซึ่งเรารวบรวมจากแหล่งข่าวอื่น ๆ ได้

‘Dividend aristocrats': Strategists name high-yielding stocks to ride out a bear marketStrategists screened for stocks with dividends of between 3% and 5%, low debt ratios and stable yields.
แหล่ง: CNBC - 🏆 12. / 72 อ่านเพิ่มเติม »

Here's the best way to play the S&P Dividend Aristocrat stocksWe combined three groups of Dividend Aristocrats, removed duplicates and narrowed the list down to the 75 that have current dividend yields of at least 2%. Here are the 10 that are expected to raise their payouts the most through 2024.
แหล่ง: MarketWatch - 🏆 3. / 97 อ่านเพิ่มเติม »

Bank stocks are super cheap — even with the risk of recessionJPMorgan Chase kicks off bank earnings on July 14.
แหล่ง: MarketWatch - 🏆 3. / 97 อ่านเพิ่มเติม »

U.S. stocks bounce around as turbulent trading persists on Wall StreetMajor indexes have been swinging between sharp losses and gains on a daily — and sometimes hourly — basis. The broader market, though, is still mired in a deep slump that has dragged the S&P 500 into a bear market, over 20% below its most recent high.
แหล่ง: CBSNews - 🏆 87. / 68 อ่านเพิ่มเติม »

Stocks rise after release of Fed meeting minutesThe minutes of the two-day meeting last month show that Fed officials concluded higher interest rates could be needed to restrain a worrying trend related to inflation.
แหล่ง: 10News - 🏆 732. / 50 อ่านเพิ่มเติม »

Jim Cramer picks 7 Dow stocks that investors should consider owningCompanies in the Dow 'tend to be boring, mature companies that typically pay nice dividends,' the 'Mad Money' host said. MadMoneyOnCNBC jimcramer All you need to own is a pair of Cloos frames🕶️
แหล่ง: CNBC - 🏆 12. / 72 อ่านเพิ่มเติม »