Top Dividend Stocks to Buy Now as Bond Yields Could Lower

Top Dividend Stocks to Buy Now as Bond Yields Could Lower

Key Points:

• Bond yields might drop in the coming months, making dividend-paying stocks more attractive.
• A diversified dividend ETF is a great option for investors who prefer not to manage individual stocks.
• Stocks with strong industry tailwinds include Schwab US Dividend Equity ETF (NYSEARCA: SCHD), Exxon Mobil Co. (NYSE: XOM), and Whirlpool Co. (NYSE: WHR).

The Shift Back to Dividend Stocks

As bond yields become less appealing, investors may rotate back into dividend-paying stocks. Here are three key options to consider:

1. Schwab US Dividend Equity ETF (SCHD):

   • Offers diversification across sectors, reducing the risks of individual stock ownership.
   • Recent price drop (~10% off its 52-week high) due to rising bond yields, but now offers a dividend yield of 9.3% ($2.56 per share payout).
   • Institutional investors are taking note:
     • MML Investor Services increased holdings by 5.9% to $145.6 million.
     • High Tower Advisors increased their stake by 0.4%, reaching $138.5 million.

2. Exxon Mobil Co. (XOM):

   • A leader in the energy sector, supported by favorable industry trends.
   • Continues to attract investors looking for income-generating assets with growth potential.

Whirlpool Co. (WHR): A Discount Opportunity

• The real estate slowdown (mortgage market index at a 1996 low) has impacted housing-related stocks like Whirlpool, presenting a buying opportunity.
• Whirlpool trades at a P/B ratio of 2.5x, well below the sector average of 5.6x.
• Offers a 6.1% dividend payout, making it attractive for income-focused investors.
• Institutional buying activity signals confidence:
  • Charles Schwab boosted its position by 14.7% (net $216.1 million), owning 3.6% of the company.

Conclusion

For investors looking to benefit from the potential bond yield drop, these options provide attractive dividend opportunities:

• Schwab US Dividend Equity ETF (SCHD) for diversification and steady returns.
• Exxon Mobil (XOM) for energy sector stability.
• Whirlpool (WHR) for discounted value and strong dividends.

These investments may offer both income and growth potential as markets shift.