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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.

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Dan Lefkovitz has a position in the following securities mentioned above: MSFT. Find out about Morningstar’s editorial policies.