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The Ultimate Stock-Pickers’ Top 10 Dividend Stocks

These top managers continue to focus on higher-quality dividend-paying stocks in a market that has become more volatile of late.

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By Greggory Warren | Senior Stock Analyst

Despite stumbling a bit in January, the U.S. equity markets (as represented by the S&P 500 TR Index) rebounded in February, and have so far held on to those gains in what has turned into a difficult March, with the benchmark up just 0.2% on a year-to-date basis at the end of last week. With investors continuing to focus on what the Federal Reserve will do next with interest rates, we've seen the markets take a dive when good news comes out on the U.S. economy (like last week's employment report), and rally in the face of poorer economic news (like the retail sales report that came out for February). Add to this a historic rise in the U.S. dollar versus other currencies, as well as another drop in oil prices, and the stage has been set for more volatility in the near term than we've seen overall the past several years. Bob Johnson, Morningstar's chief economist, believes that the market is spending way too much time on the "when" part of the rates question, and not nearly enough on the "how much, how long, and in what increments" issues. He thinks that any delay in Fed rate increases (while perceived favorably by investors) only means that future increases will be larger and/or subsequent rate increases could be spaced much closer together--that is, assuming that the U.S. economy continues to recover.

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The Morningstar Ultimate Stock-Pickers Team has a position in the following securities mentioned above: PG, MO. Find out about Morningstar’s editorial policies.