The broad stock-market rally so far in 2023 might make it easy to forget what a rough ride investors faced last year. It was a time when some active strategies focused on dividends, good cash-flow trends and other quality attributes held up better than popular indexing strategies.
During an interview, Getaz and Quinlan discussed how they select dividend stocks and how investors can see warning signs that can help them steer clear of companies showing poor long-term trends. While dividend-focused strategies have underperformed broad indexes during bull markets, things change when times are tough. This one-year chart shows how the funds have outperformed the SPDR S&P 500 ETF SPY with dividends reinvested:
When asked about Intel, Quinlan said: “In any situation like that, it is a fair question as to whether or not the dividend is sustainable.” Taking this analysis further, let’s look at the four stocks again, focusing more narrowly on dividend yields: