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  • Writer's pictureRealFacts Editorial Team

Dividend Stocks: The Market’s Current Winning Investment

Stocks on a screen

Many high cash flow companies, including some notable Magnificent seven stocks, have begun issuing and increasing dividend payouts to shareholders. The market is taking notice and it seems to be reacting extremely positively to dividend growth. Chris Senyek, chief investment strategist at Wolfe Research, said, “While many investment strategies have lagged the tech-heavy and ‘Mag 7’ stocks over the past year, high dividend growth and high free cash flow has kept up,”

Ben Kirby, co-head of investments at Thornburg, said, “Dividend investing is an attractive long-term structural investment strategy, it’s tried and true… It tends to generate attractive returns and, in many cases, better returns to the overall market, usually with less volatility… If you try a little bit harder, you can build an active portfolio that has a 5% yield, is trading at 10 times earnings and has the potential for that dividend stream to grow over time.” Dividend stocks could also become more attractive as investors seem to be pulling out of bonds, if balance sheets remain robust, dividend stocks could act as a sort of pseudo-fixed income investment. Companies increasing dividends shows that they have large amounts of free cash flows and are willing to give value to their shareholders.

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