I'm Daniel Peris, Senior Portfolio Manager at Federated Hermes.
What dividend-paying sectors currently have favorable valuations?
I love the question because the answer's all of them. And I'm not trying to be, you know, sarcastic or funny in that regard. As I mentioned, literally it's been five years of being what I call in the wilderness. The dividend paying, the high dividend-paying oriented companies and sectors, they tend to aggregate in sectors, have been in the wilderness for five years. And there aren't any that were not in the wilderness. That is those typical sectors, utilities, consumer names, larger pharma companies, they have been not, you know, struggling. They just haven't been dominant the way certain shall we say social media and new economy companies have been over the last five years. And so we actually have quite a wide range of choices, the dividend-focused investor or portfolio manager. It's really the usual suspects but almost all of the usual suspects are fairly attractive at this point in time. We don't have a sector that is a flashing red in terms of valuation. They're all really flashing green because investor preferences, again, backward-looking over the last five years, have been in the completely opposite direction, leaving I would argue cashflow-paying, cashflow-growing, brand-name companies hiding in plain sight in the marketplace. And the entire portfolio kind of dynamic is quite attractive at this point in time.
Disclosure: Views are as of July 16, 2021 and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector. Investments are subject to risks and fluctuate in value. There are no guarantees that dividend paying stocks will continue to pay dividends. In addition, dividend paying stocks may not experience the same capital appreciation potential as non-dividend paying stocks. Past performance is no guarantee of future results. Federated Equity Management Company of Pennsylvania 21-30334 (7/21)