Dividend stocks look attractive with a volatile year that nets measly returns expected ahead
2020-01-12 23:52

Stocks may be at record highs, but 2020 has already proven to be a volatile year, leading a growing cohort of Wall Street strategists to recommend stable dividend-paying investments.


Favorite names recommended by the banks include Citgroup, Verizon and Cisco. There are also a bevy of exchange-traded funds which track the style.


Unlike growth stocks that have led the market's record-long bull run, dividend stocks typically don't offer dramatic price appreciation, but they do provide investors with a steady stream of income. This type of strategy can bode well for investors in a much riskier year ahead grappling with Middle East unrest, more China trade talks and a U.S. presidential election.


"Dividend strategies have increasingly become top of mind for investors that want to participate in the up market that continues but they want to be prepared for the volatility that feels like is around the corner," said Todd Rosenbluth, head of ETF & mutual fund research at CFRA.

CFRA ETF和共同基金研究主管Todd Rosenbluth说,对于那些希望参与持续上涨的市场,但又希望为即将到来的波动做好准备的投资者来说,股息策略日益成为他们的首选。

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Wall Street analysts largely see much more modest returns in 2020 following a historic run last year that saw the S&P 500 soaring nearly 29%. The average year-end target for the benchmark comes to 3,345, a measly 2% gain, according to CNBC's Market Strategist Survey. In comparison, a popular dividend-focused exchange-traded fund — iShares Select Dividend ETF — currently has a dividend yield of 3.6%.

华尔街分析师普遍认为,在去年标普500指数飙升近29%的历史性涨幅之后,2020年的回报率将温和得多。据美国全国广播公司财经频道(CNBC)的市场策略师调查,基准股指的平均年终目标是3,345点,涨幅只有区区2%。相比之下,专注于派息的交易所买卖基金iShares Select Dividend ETF目前的股息收益率为3.6%。

"If returns are more muted, the income component of the total return is going to play a more meaningful role," Rosenbluth said.


Time to shift


Since the end of 2019, a slew of top financial institutions including Goldman Sachs, UBS and Bank of America Merrill Lynch have started advising clients to buy dividend-paying stocks and strategies to hedge against rising risks and an aging bull market.

自2019年底以来,包括高盛(Goldman Sachs),瑞银(UBS)和美银美林(Bank of America Merrill Lynch)在内的许多顶级金融机构已开始建议客户购买派息股票,以及对冲不断上升的风险和日益老化的牛市的策略。

Investors seem to have already warmed to the idea. In the fourth quarter alone, dividend ETFs experienced more than $10 billion in new money, which was more than any other factor-oriented strategies, according to data from CFRA. The inflows came even as the stock market rallied into the year-end, a sign that investors were getting nervous.


"How to hedge against things going wrong? We now prefer utilities (pure domestic, stable earnings) over staples as a way to generate high dividend," Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America, said in her "year ahead" outlook.

美国银行美国股权与量化策略主管Savita Subramanian在展望未来一年时表示,如何对冲出错的风险?我们现在更倾向于公用事业(纯国内,稳定的获利)而不是材料股,作为一种产生高股息的方式。

UBS warned clients of a continued slowdown in the economy last month and screened for a handful of dividend growers to combat that.


Stocks with the fastest dividend growth include Citigroup, pharmaceutical company Eli Lilly and medical equipment and drug producer Baxter, UBS said.

瑞银表示,股息增长最快的股票包括花旗集团、制药公司Eli Lily、医疗设备和制药商巴克斯特(Baxter)。

There are a variety of ETFs on the market that lump a bunch of high-dividend stocks together. Below are the top five dividend-focused ETFs arranged by assets, according to ETF.com.


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'Low-for-longer interest rates'


Adding to dividend strategies' appeal is how low interest rates are, which makes bonds less attractive to investors seeking income. The Federal Reserve slashed borrowing cost three times in 2019, pushing 10-year Treasurys below 2% and lower than the S&P 500's dividend yield of 2.1% last year.

股息策略的吸引力还来自于低利率,这使得债券对寻求收益的投资者不那么有吸引力。美国联邦储备委员会(The Federal Reserve)在2019年三次大幅削减借款成本,导致10年期美国国债收益率跌破2%,低于标准普尔500指数(S&P 500)去年2.1%的股息收益率。

"Low-for-longer interest rates are a reality, no longer a forecast," Steven Major, HSBC's global head of fixed income research, said in note. "The decade of denial saw expectations of cyclical recovery often disappointed and a similarly misplaced belief in the view that bond yields would rise."

汇丰银行(HSBC)全球固定收益研究主管Steven Major在报告中说,长期低利率已成为现实,不再是预测。在否认长期低利率的10年里,对周期性复苏的预期往往令人失望,对债券收益率将上升的看法也同样错误。

In an environment of disappearing yields, Goldman started touting its dividend growth basket as one of its two recommended strategies in 2020, which "offers longer-term investors a premium yield while positioning for a value rotation." The basket has a dividend yield of 3.6% and twice the S&P 500's dividend growth through 2021, Goldman said.


Stocks in the Goldman portfolio include AT&T, Verizon, Morgan Stanley, Amgen and Cisco.

高盛投资组合中的股票包括美国电话电报公司(AT&T),威瑞森(Verizon),摩根士丹利(Morgan Stanley),安进(Amgen)和思科(Cisco)。

Record payments


Time could be ripe for dividend stocks to stage a comeback after a decade of underperformance. They have trailed the S&P 500 consistently for the past 10 years as growth stocks with rapid profit increases have enjoyed most of the love.

在经历了10年的表现不佳之后,派息类股可能时机已经成熟,可以东山再起了。过去10年,它们一直落后于标准普尔500指数(S&P 500),因为利润迅速增长的成长型股票最受青睐。

Last year, stocks with the highest dividend yields underperformed stocks with low or no yields as the S&P 500 notched its best annual performance in six years, according to Bespoke Investment Group.


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Meanwhile, dividend issuance is showing no signs of slowing. S&P 500 stockholders received a record amount of dividends in the fourth quarter of 2019, totaling $126.4 billion, according to S&P Dow Jones Indices. The amount was a 5.5% increase from the same quarter in 2018.


— CNBC's Michael Bloom and Nate Rattner contributed to this report.

— CNBC的Michael Bloom和Nate Rattner为本报告做出了贡献。

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