Do you love dividends? Of course you do — and rightly so!
In a recent study conducted by Mike Wilson, Chief Investment Officer at Morgan Stanley, the analysis focused on the performance of dividend-paying stocks compared to non-dividend-paying stocks since the year 2000. The historical data underscores a compelling trend: dividend-paying stocks consistently outperform non-dividend stocks over the medium to long term.
That outperformance has even been more pronounced in times of uncertainty and market retreats. “Specifically,” Wilson noted, “the majority of outperformance comes during large market pullbacks such as 2000, 2008, 2015, and 2020.”
With uncertainty currently prevailing, Wilson believes it might be the right time to seriously consider loading up on these classic defensive plays.
Against this backdrop, the analysts at Morgan Stanley have pinpointed an opportunity in a pair of dividend stocks with enticing attributes: a high dividend yield to outpace the current inflation rate, an attractive valuation, and the potential for future share price growth.
In fact, it’s not only Morgan Stanley who favors these names. Using the TipRanks database, we found that both are also rated as ‘Strong Buys’ by the analyst consensus. Let’s take a closer look.
Philip Morris International (PM)
We’ll start with one of the best-known names in the ‘sin sector,’ Philip Morris International. This is a leader in the tobacco industry, and the owner, with full production and marketing rights, of the Marlboro cigarette brand’s international footprint. Some of the company’s other brand names include L&M, Chesterfield, and Next, along with – you guessed it – Philip Morris. The company has a presence in over 175 global markets, and can boast that, in most of them, it holds the first- or second-place market share for cigarettes and other tobacco products.
Those leading market shares are solid assets, because even with the growing social pressures against smoking, the tobacco industry totaled some $867 billion in 2022 – and by the end of this decade, the…