Bank of Montreal says dividend growth stocks are a great way to protect a portfolio and boost performance during volatile times. While stocks are in positive territory so far this year, the gains have been accompanied by bouts of volatility. Still, BMO chief investment strategist Brian Belski said in a report last week that he remains bullish on stocks in 2025 and doesn’t see major problems. “Nonetheless, given current market dynamics, we do believe price volatility and volatility will become more frequent in the coming months, and we believe investors will require further discipline and perspective,” he wrote. As a result, Belsky will Turning to dividend growth stocks is one of his favorite long-term strategies. It focuses on stocks with both growth and yield attributes, he said, because these companies tend to have a history of consistent profits and cash flow. He noted that these characteristics typically reward investors over longer periods of time. Dividend growth strategies outperform other strategies during periods of volatility as well as during periods of market strength, Belsky said. He said: “For example, looking at rolling one-year monthly returns since 1990, when the S&P 500 has gained 10% or more, dividend growth stocks have outperformed the market by an average of 4.4 percentage points.” In addition, Bank of Montreal’s analysis shows that its dividend growth strategy has historically outperformed the market during periods of rising interest rates. Although the 10-year Treasury yield fell on Tuesday, it has been steadily higher since last fall. Companies in the BMO strategy have not cut their dividends in the past five years and currently have higher dividend yields than the S&P 500. Each stock has a higher free cash flow yield than its dividend yield. Here are some of the names that made the cut. The companies listed below are rated Outperform. Two energy companies, Hess Petroleum and Marathon Petroleum, made the list. The dividend yields on these stocks are 1.3% and 2.4% respectively. Hess has gained 8% over the past 12 months, while Marathon has fallen nearly 2% during that period. Hess is preparing to be acquired by Chevron for $53 billion. Although the acquisition has been approved by the Federal Trade Commission, the dispute between Hess and ExxonMobil still needs to be resolved before the deal can be completed. A hearing before a three-judge arbitration panel will be held in May. Overall, energy companies are expected to benefit from the Trump administration’s policies. The president laid out a sweeping agenda Monday that includes expanding oil and gas drilling. Financial stocks – especially bank stocks – are expected to be boosted by Trump’s policies, including deregulation. Insurance stocks Cincinnati Financial and Everest Group are included in BMO’s strategy. The dividend yield of the former is 2.3%, and the dividend yield of the latter is 2.2%. Cincinnati Financial’s shares have gained 25% in the past 12 months, while Everest has fallen nearly 3%.
BMO says these dividend growth stocks are poised to outperform | Real Time Headlines
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