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Ned Davis Research: 6 Dividend Stocks Poised to Surge

Ned Davis Research: 6 Dividend Stocks Poised to Surge
(Dollar Photo Club)

By    |   Tuesday, 17 November 2020 09:15 AM

Ned Davis Research reportedly thinks it is a good time to start buying dividend stocks.

The firm said in a note on Tuesday that dividend stocks performed in an unusual way during the coronavirus recession, trailing non-dividend payers during both the market decline and the rebound, CNBC explained.

Dividend stocks normally are a safe haven during times of a recession and market volatility, but in this case the coronavirus pandemic hit key dividend payers like REITS and banks while rewarding internet stocks which don’t pay a dividend. That atypical pattern has put dividend stocks at an extremely oversold position, CNBC said.

“The bottom line is that Dividend Payers are exiting the worst phase of the bull market cycle relative to Non-Payers in their most oversold state in a decade,” the note said.

That dynamic makes this a good time for investors to think about buying dividend stocks, Ned Davis Research said.

There are some higher-than-average dividend payers in the S&P 500 that have seen recent buy recommendations from Wall Street analysts.

The list below of six companies from FactSet includes stocks with a dividend yield above 4.8% that have received buy ratings from more than 50% of analyst notes in the past 30 days.

  1. Philip Morris (PM)
  2. Williams (WMB)
  3. Citizens Financial (CFG)
  4. Altria (MO)
  5. AbbVie (ABBV)
  6. Iron Mountain (IRM)

Meanwhile, opinions differ as to the future direction of the stock market.

Fund managers overseeing $526 billion are the most bullish they’ve been this year following the U.S. election outcome and progress on a vaccine, prompting a call from Bank of America Corp. strategists that it’s time to start selling risk assets.

The monthly survey, conducted Nov. 6 through Nov. 12 saw investor optimism about stocks skyrocket, with allocation jumping to the highest level since January 2018, Bloomberg reported.

Cash holdings plunged to the lowest level since April 2015, while economic growth expectations surged to a 20-year high. Investors snapped up more volatile assets, such as small-caps, value, banks and emerging-market stocks, while shifting away from bonds and staples.

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Ned Davis Research reportedly thinks it is a good time to start buying dividend stocks.
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Tuesday, 17 November 2020 09:15 AM
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