An early-year tumble in major U.S. stock indexes has some investors searching for safety by dumping shares of high-growth technology stocks for stodgier businesses that pay shareholders cash, including banks, oil companies and telecoms.
Through Feb. 4, the S&P 500 High Yield Dividend Index—made up of the S&P 500’s top 80 dividend-paying companies—was up 2.1% including dividends, compared with a negative total return of 5.5% for the broad benchmark through Friday. The average dividend-paying stock in the S&P 500 rose by 6.6 percentage points more than nonpayers in January, the biggest margin favoring payers in 17 years, according to S&P Dow Jones Indices.
Rising inflation and the prospect of the first interest-rate increases by the Federal Reserve in more than three years has raised questions about the economy’s durability. Income-generating stocks are seen as a safe harbor from those worries, analysts said, while once-highflying stocks, including some tech behemoths’ shares, have been laid low as investors try to select tomorrow’s winners and losers.Investors Gobble Up Dividend Stocks During Market Turbulence – WSJ