My Favorite Sectors To Find Dividend Stocks In April 2024

seekingalpha04-16

Selecting the right sectors for dividend stocks is crucial for long-term total return outperformance and sustainable dividend growth.I share the criteria that I look for and my favorite sectors.I also...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMy Favorite Sectors To Find Dividend Stocks In April 2024\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-16 20:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4683951-my-favorite-sectors-to-find-dividend-stocks-april-2024><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Selecting the right sectors for dividend stocks is crucial for long-term total return outperformance and sustainable dividend growth.I share the criteria that I look for and my favorite sectors.I also...</p>\n\n<a href=\"https://seekingalpha.com/article/4683951-my-favorite-sectors-to-find-dividend-stocks-april-2024\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4135","symbol_name":"资产管理与托管银行","start_time":0,"source_url":"https://seekingalpha.com/article/4683951-my-favorite-sectors-to-find-dividend-stocks-april-2024","article_id":"2427826982","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/522245255/image_522245255.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2427826982","pubTimestamp":1713269700,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Selecting the right sectors for dividend stocks is crucial for long-term total return outperformance and sustainable dividend growth.I share the criteria that I look for and my favorite sectors.I also","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4135":"资产管理与托管银行","VNQ":"不动产信托指数ETF-Vanguard","SPY.AU":"SPDR® S&P 500® ETF Trust","CFA.SI":"NikkoAM-STC Asia REIT","OEF":"标普100指数ETF-iShares","BIP":"布鲁克菲尔德公共建设","O":"Realty Income Corp","XLU":"公共事业指数ETF-SPDR","OEX":"标普100",".SPX":"S&P 500 Index","BK4570":"地缘局势概念股","BIPC":"Brookfield Infrastructure Corp","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","SSO":"两倍做多标普500ETF","IVV":"标普500指数ETF","BAM":"布鲁克菲尔德资产管理","BK4080":"零售业房地产投资信托","BIZD":"VanECk BDC Income ETF","LU0238689110.USD":"贝莱德环球动力股票基金","SH":"标普500反向ETF","SDS":"两倍做空标普500ETF","ENB":"安桥","SPXU":"三倍做空标普500ETF","BK4208":"复合型公用事业","XLE":"SPDR能源指数ETF","BK4231":"零售房地产信托","UPRO":"三倍做多标普500ETF","BK4197":"燃气公用事业","BK4561":"索罗斯持仓","SPY":"标普500ETF"},"translate_title":"2024年4月我最喜欢找分红股票的板块","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SPY":1,"XLU":1,"XLE":1,"VNQ":1,"SPY.AU":1,"O":1,"ENB":1,"BAM":1,"BIP":1,"BIPC":1,"BIZD":1,"CFA.SI":0.9,"US12M.BOND":0.82,"US10Y.BOND":0.82,"US2Y.BOND":0.82,"US30Y.BOND":0.82,"US3Y.BOND":0.82,"US5Y.BOND":0.82,"US6M.BOND":0.82,"US7Y.BOND":0.82,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,"US912797HG57.BOND":0.6,"US912797HH31.BOND":0.6,"UPRO":0.6,"ESmain":0.6,"IVV":0.6,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,".SPX":0.6,"SSO":0.6},"content_text":"Selecting the right sectors for dividend stocks is crucial for long-term total return outperformance and sustainable dividend growth.I share the criteria that I look for and my favorite sectors.I also share some of my top picks of the moment.DMP/E+ via Getty Images Selecting the right sectors for dividend stocks is very important for two reasons:  Some sectors tend to significantly outperform others in various macroeconomic environments. Some sectors/business models are more conducive than others to long-term dividend sustainability and growth.   The gap in dividend stock performance by sector has been particularly evident since the beginning of 2022 when interest rates began to rise rapidly. Over that period, interest rate-sensitive sectors like REITs (VNQ) and utilities (XLU) have significantly underperformed high-yield sectors that tend to benefit from rising inflation and interest rates, like BDCs (BIZD) and energy (XLE): Data by YCharts As a result, if you had loaded up almost exclusively on REITs and BDCs over the past two years, you would have very likely lost money, whereas if you had loaded up on energy and BDC stocks over that period, you would very likely have come out significantly ahead. In addition to the benefits of near- to medium-term total return outperformance that come with selecting stocks and/or funds in the right high-yield sectors, there is also a benefit that comes with picking businesses that operate in sectors and have business models that tend to better fit the four traits of a great long-term dividend investment:  Those that have durable and defensive business models. Those that have strong balance sheets. Those that have well-covered and growing dividend payouts. Those that have sufficiently high current dividend yields.  In this article, we will discuss which sectors tend to best fit these four qualities, and then discuss which of those looks the most attractive right now. The Best Sectors For Finding Great Long-Term Dividend Investments The sectors that tend to contain the most great long-term dividend investments are:  REITs Utilities Infrastructure Midstream Alternative Asset Managers  While you can find plenty of durable and defensive models, strong balance sheets, well-covered and growing dividend payouts, and high current dividend yields in other sectors, it is quite rare to find all of these traits combined in single companies. However, in the above five sectors, it is actually fairly common. This is because REITs, infrastructure, and midstream businesses tend to own well-diversified portfolios of real assets that provide essential services like shelter, transportation, and energy that - due to the real asset nature of their assets - are hard to displace with technological innovation. Moreover, they tend to have lengthy contracts attached to their assets, giving them quite stable cash flow across economic and industry cycles. Utilities also share similar traits, given that the electricity, gas, and water that they provide to consumers is an essential service and a durable business model. Moreover, the regulated nature of their business makes it very defensive. Finally, alternative asset managers currently benefit from substantial tailwinds in numerous sectors like private credit and infrastructure as capital flows into those sectors and the long-dated or even permanent nature of their funds gives them a stable source of fee-based earnings regardless of the current economic environment. Additionally, each of these sectors has an abundance of businesses with investment-grade credit ratings, and bankruptcies are very rare in each of them. Furthermore, REIT, utility, infrastructure, and midstream businesses each tend to have reasonable payout ratios and each industry has plenty of businesses with strong dividend growth histories as each sector makes a habit of retaining plenty of cash flow to reinvest in growing their businesses for the long term. Alternative asset managers tend to have higher payout ratios, but that is largely due to the asset-lite nature of their business models and their ability to continue generating strong dividend growth through fundraising without having to reinvest much capital. Finally, all of these sectors also tend to offer dividend yields that are well above that of the broader S&P 500 (SPY), making them attractive places to allocate capital when looking to boost portfolio income. Some Top Picks Of The Moment While there is an abundance of attractive opportunities in the five aforementioned sectors right now, here is one from each of them that we think meets each of the four qualities of a great dividend stock and is a Buy at the moment:  REIT: Realty Income (O) Utility/Infrastructure: Brookfield Infrastructure Partners (BIP)(BIPC) Midstream: Enbridge (ENB) Alternative Asset Manager: Brookfield Asset Management (BAM)  O has a very defensive and durable business model, given that it implements a conservative triple net lease structure across its vast real estate empire. Moreover, it is largely focused on retail assets that provide essential services that are resistant to recession and/or e-commerce. Moreover, over 40% of its rental revenue comes from investment-grade tenants, and it has lengthy leases attached to its assets with contractual annual rent increases. Additionally, it has an A- credit rating, which serves as evidence of its very strong business model. Last, but not least, its dividend is well-covered by AFFO, its dividend growth track record is exceptional (spanning over a quarter-century), and its current dividend yield of ~6% is very attractive compared to SPY's paltry 1.3% dividend yield. BIP also checks all the boxes given its diversification across numerous essential and growing sectors (utilities, midstream, transportation, and data), significant exposure to regulated and contracted assets, BBB+ credit rating with significant liquidity, its well-covered distribution relative to its AFFO, its impressive distribution growth track record and outlook (high single digit CAGR), and 6.3% distribution yield. ENB is another very durable and defensive business given that nearly all of its cash flow comes from assets that are either regulated or contracted, it has a BBB+ credit rating, its dividend growth streak is longer than a quarter-century, its payout is covered very well by distributable cash flow, and its current dividend yield is a juicy 7.7%. Finally, BAM is the world's second-largest alternative asset manager, generates a large percentage of its earnings from sticky and long-dated assets under management, has an A- credit rating, and offers investors a ~4% dividend yield that is fully covered by distributable earnings and is expected to grow at a high-teens CAGR in the coming years. While it is not extremely cheap at the moment, for investors looking for greater growth while still earning a yield that comfortably exceeds what is being offered by the broader market indexes, BAM is an attractive option. Investor Takeaway  While it is important to have a well-diversified portfolio in general, high-yield investors can maximize their long-term passive income growth and overall wealth compounding by focusing on a few key sectors where most of the great long-term dividend investments can be found. I have personally found that the REIT, utility/infrastructure, midstream, and alternative asset management sectors have some of the most rewarding and highest quality high-yielding opportunities and - fortunately - also offer some attractively priced high-quality, high-yielding opportunities right now.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2427826982"}