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Market Update

The Value Rebound Is Good News for Dividend Investors

Equity income is well-positioned, both short- and long-term.

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Dividend investors, like so many others, have experienced 2020 as an annus horribilis. The pandemic-driven economic downturn prompted a raft of companies to cut or suspend planned payouts to shareholders. In February, when equities entered a bear market, dividend payers fell harder and further than most. The Morningstar Dividend Yield Focus Index plunged by more than 25% in the first quarter, while the broad Morningstar U.S. Market Index dropped 20%. When stocks bounced back, dividend payers lagged.  

But since November, dividend payers have mounted a comeback. The Morningstar Dividend Yield Focus Index has outpaced the market since early November.

Dan Lefkovitz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.