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According to BMO Capital, it’s time to think about quality stocks and stocks with dividend growth instead of traditional remedies to deal with more volatility. The market is experiencing its worst day since June 2020, with the S&P 500 falling more than 4% on Tuesday amid hotter-than-expected US inflation data. Stocks have been under pressure all year as worries about high inflation, rising interest rates and an economic downturn are leading traders to dump stocks. Those who stick to stocks are turning more to defensive sectors such as consumer goods and utilities to fight uncertainty. However, BMO Capital has other recommendations for investors to protect and grow their portfolios. “[We] We believe there are better ways to deal with price swings and volatility than using defensive measures,” BMO Capital’s Brian Belsky wrote on Tuesday. increasing levels of volatility, and did a better job of providing downside protection during market downturns, as well as participating in price increases,” Belsky added. returns since 1990, when the S&P 500 index fell more than 10% year-on-year, BMO’s dividend quality and growth figures have fallen only 6.4% and 1.1%, respectively. period of time, and the market as a whole decreased by an average of 21.4%. ve for long term growth, according to the firm. “The high quality and growth of dividends demonstrate higher return on equity, better earnings growth over the long term, and superior dividend growth on both rolling and forward basis compared to their defensive counterparts, characteristics we consider important when it comes to constancy of long-term results. “, the note says. BMO has tested high-quality stocks in the S&P 500 that have low earnings-per-share growth volatility compared to the broader market, high cash levels, and high return on equity. The firm also looked for stocks that have higher dividend yields than the benchmark index and have not cut dividends in the last five years. Here are 10 names for high quality and dividend growth. Costco is a high-quality choice that has performed best this year, down about 10% compared to the S&P 500’s 17% drop. Retail shares are up 6.6% this quarter. The quality name Texas Instruments is down about 12% this year. Semiconductor stocks also outperformed the market as a whole this quarter, up 7.4% over that time. ConocoPhillips is a BMO-marked high dividend growth company. Energy inventories are up 60% this year on the back of higher oil and gas prices and are up 29% this quarter alone. Other names included in this list are Microsoft, Cognizant Technology, Discover Financial Services, and TJX.
Credit: www.cnbc.com /