Which U.S. market sectors and holdings remain attractive for dividend investing?
There are those segments of the US market that are naturally conducive to the dividend collector, but there are those areas that are naturally hostile as well. That might not be commonly understood. When you do take a deep dive on the S & P 500 for example, those areas that are naturally fertile for the dividend collector include consumer staples. Think about diapers and toilet paper, household products, beverages, tobacco for example. Other areas that are natural for dividend portfolios include utilities and telecom services. Think about pharmaceuticals within health care even integrated energy providers, really the necessities of life can support a progressive dividend policy regardless of where you're at in the market cycle. Which brings up an important point, there are those areas again that are hostile for the dividend collector. They include those cyclicals that are dependent on where they're at in the market cycle for profitability let alone a reliable dividend check. That included tech, industrials, materials, consumer discretionary. So, when you think about dividend investing, it's not going to be a market complete exercise. The true dividend collector is really seeking just those areas of the market that can deliver on that mandate of a high and rising income stream.
Views are as of Jan. 23, 2018 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. 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. Federated Equity Management Company of Pennsylvania 18-72980 (2/18)