Under the continued high inflation and increasingly tightening monetary policy, Wall Street is setting off a “cash is king” craze, flocking to high-dividend companies.
Since the beginning of this year, the $SPDR S&P 500 High Dividend ETF (SPYD.US)$ has risen by more than 6%, far outperforming the performance of the broader market, while the $SPDR S&P 500 Index ETF (SPY.US)$ has fallen by more than 16% during the same period.
In the S&P 500, many high-dividend companies have also outperformed by a large margin this year. Among the companies with the highest dividend yields in the S&P 500 index according to MarketWatch, the U.S. natural gas pipeline giant $Williams (WMB.US) $ has risen more than 40% this year, with a dividend yield of 4.69%; North American energy infrastructure giant $Golden Del Morgan (KMI.US)$ has risen by more than 26%; $AT&T (T.US)$ has risen nearly 20%; tobacco giants $Philip Morris (PM.US)$ , $Altria (MO.US)$ Both rose more than 15%.
However, the US real estate giant Simon Property (SPG.US) performed poorly and recorded a double-digit decline as the rapid rise in US housing prices and rising loan interest rates hit demand for housing.
The S&P 500 paid a record $137.6 billion in dividends in the first quarter, according to S&P Dow Jones Indices Inc., and senior index analyst Howard Silverblatt expects a new record for the quarter.
Jefferies analysts also said that historical data shows that high-dividend stocks known as “cash machines” typically outperform the market during periods of high inflation and slowing economic growth.
For investors, high-yielding dividend-paying stocks may be an excellent “safe haven” amid the current market volatility, promising stable cash flow even as stock prices fluctuate.
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