Rising interest rates are usually the kill shot for dividend stocks. But there’s a category of high- yielding equities that have questioned it.
These are the companies with big dividends that are also projected to raise them, according to data compiled by Bloomberg and Goldman Sachs Group Inc.
That kind of stocks have surged more than 30 percent since the start of July, beating the S&P 500 Index by the most in eight years.
Flows into the iShares Core Dividen comparable period.d Growth ETF, which tracks companies growing dividend yields, have totaled $774 million since the start of July, including net inflows of $312 million.
Goldman isn’t as bullish on the prospects of companies that rely on share buybacks.
Here are details on the Goldman Sachs index designed to track companies that are raising dividends:
* Goldman Sachs Dividend Growth Basket contains 50 stocks with a median expected 2017 dividend yield of 2.6%; the firm expects they’ll raise their dividends by an average of 12% in 2017
** To compare, the median stock in the S&P 500 has a 1.9% expected 2017 dividend yield and median dividend growth of 6% for the year: Goldman client note dated Jan. 18
** The basket has outperformed the S&P 500 by 10 percentage points since the start of July.
** Companies in the index (as of March 17): VFC, IPG, WHR, HD, LOW, PHM, MO, RAI, ADM, CVS, MJN, VLO, PSX, MPC, TSO, LM, HBAN, KEY, MMC, MS, BEN, UNM, ABBV, PFE, AMGN, CAH, MDT, ABT, DGX, BA, NLSN, ITW, HON, IR, CSCO, XRX, HPQ, IBM, TXN, MSI, MSFT, GLW, ADP, HRS, AAPL, DOW, EXR, VZ, NEE, EIX
Source Bloomberg
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