With the Federal Reserve expected to resume its fee-cutting cycle on Wednesday, investors may begin looking for new revenue opportunities for dividend paying stocks. According to the CME FedWatch tool, the market is priced at a 100% chance that central banks will lower fees at meetings, with the majority expecting 25 basis points (0.25 percent points). As a result, yields on cash equipment such as money markets and short-term bonds should begin to collapse. Bond yields move inversely to the price. Due to the decline in bonds, dividend payments usually look relatively attractive. According to Morgan Stanley, dividends are also a good way to maintain investment through uncertainty. “In a period of rising risk and valuation, dividends become (a) a more important part of the investor’s total revenue, dampening stock prices and providing support for stock prices.” “A slow growth rate and lower interest rate environment make dividends more durable and higher yields relatively attractive as cash and bonds become less profitable.” Still, investors should not focus solely on stocks with the highest dividends, as higher yields can be a sign of internal distress. Instead, many people focus on dividend growth. A survey by Morgan Stanley found that stocks are superior at an average of 3.1%, six months after companies announced dividend raises. The Index consists of S&P 500 companies that have boosted payments over the past 25 years, so investing in dividend aristocracy is one way to ensure that dividend producers are acquired. The Exchange Trading Fund that tracks the performance of that index is the ProShares S&P 500 Dividend Aristocrats ETF. Nobl YTD Mountain Proshares S&P 500 Dividend ARISTOCRATS ETF As of 2019, the ETF has a dividend yield of 2.46% and an expense ratio of 0.35%. In contrast, the S&P 500 harvests. 1.12%. Top holdings for the fund include Ch Robinson Worldwide, Lowe and Abbvie. Some investors told CNBC that there are dividend stocks that may not yet meet the strict 25-year standard of dividend growth index, not just “nobles” but also shopping. “For us, it’s a little old,” Cressett’s chief investment strategist Jack Ablin said of the 25-year standard. For example, he pointed out that Apple would not be eligible because it reinstated its dividend in 2012. Ablin says it has a shorter track record than dividend Aristondocrats, but is also a high quality company. “These are companies that have a long track record of maintaining and growing dividends over time,” he said. “Historically, if the payment rate remains roughly constant, revenues usually outweigh inflation.” Ablin not only views cash flow generation when selecting stocks, but also considers leverage ratios that measure the degree to which a company uses its debt to fund its business. “We are looking at the right liquidity and have since taken part in circular companies with reasonable profit margins,” he said. “We want businesses to be able to maintain themselves through recession and expansion,” he said, including names such as Chubb and Cardinal Health. The former has a dividend yield of 1.41%, a decline of 1.7% per year, while the latter has a yield of 1.36%, which has so far increased 26% this year. It is also important that the CAH YTD Mountain Cardinal Health Year to to Tute Capital Appretiation should not lose sight of potential capital gains. Kevin Simpson, founder and CEO of Capital Wealth Planning, focuses on dividend growth stocks in his clients’ portfolios, and generally prefers an increase in payment history over five years. “If you go a little further and think that dividends are increasing because of revenues, generally speaking, if you’re investing in a company that’s increasing revenues, then you should see a rise in stock prices at some point,” he added. Dividend producers also tend to be subsector leaders, demonstrating capital discipline in terms of reinvesting shareholder payments, according to Matt Quinlan, portfolio manager at Franklin Templeton. He is the co-lead manager of the Franklin Rising Dividend Fund. “These are attributes that help businesses achieve capital gains over time,” he said. “At the same time, companies that expand dividends and have attractive dividend profiles also tend to be more resilient, which helps to provide downside capture and tougher markets.” FRDPX YTD Mountain Franklin Rising Rising Dividends Funds Year. Financial Stocks Quinlan has been seeing opportunities within the financial sector recently. For one, he said banks operating in the capital markets benefit from increased activity. Finance also benefits from deregulation and the picking of business activities that come from declining rates, he noted. He added that consumer spending is resilient. “We’re also seeing some really good dividend growth,” Quinlan said. “That’s because they’re growing and they have a strong capital base.” Franklin Rising Dividends Fund Holdings includes Morgan Stanley and Charles Schwab. Morgan Stanley earns 2.55% and earns 24% per year. Charles Schwab has a dividend yield of 1.17%, up 23% so far this year. MS YTD Mountain Morgan Stanley also likes Simpson’s top pick, Simpson, as well as several financial names, including JP Morgan and Goldman Sachs. Both stocks are already on track and should continue “because they have such profitability,” Simpson said. JPMorgan has a dividend yield of 1.81%, and has grown 29% so far this year, while Goldman has earned 2.03% and earned 37% per year. Home Depot, which has a dividend yield of 2.18%, is also an attractive opportunity, Simpson said. HD YTD Mountain Home DepotIn the past year, he said it should not only grow strong dividends, but also be a big beneficiary with lower fees. “Homeowners may consider low rates for HELOCS (Home Equity Credit Line) and allow them to do things they haven’t done since the pandemic. What’s more, Home Improvement Store has a strong business on the commercial side, which should benefit from pick-ups from upgrade properties by professional real estate investors. Home Depot’s stock is up over 8% per year. (Learn the best 2026 strategy from within the NYSE along with Josh Brown and others on CNBC Pro Live. Tickets and info here.)
