The Best Conservative Dividend Stocks for 2021

 

While a surprisingly good year for the market, 2020 has not been kind to dividend payers. But that’s starting to change. Here are 4 conservative dividend stocks for 2021.

This has been a strong year for stocks. The year-to-date returns for the three major indices are as follows: Dow Jones 5.35%, Nasdaq 40.93%, and the S&P 500 13.61%. All three are near the all-time high.

 

But while it’s been a good year for the indexes and a great year for technology, dividend stocks have lagged badly. The SPDR S&P Dividend ETF (SDY), which tracks the performance of the High Yield Dividend Aristocrats Index, is down more than 5% in 2020.

 

It just hasn’t been a good recovery for dividend stocks in general, so far. Some of the best traditional dividend-paying sectors, including energy, finance and industrials, have taken it on the chin during the pandemic and have been the worst-performing S&P 500 sectors during the recovery. The high dividend-paying sectors of real estate and utilities are also in negative territory for the year.

 

Technology has led the market higher since the lows of March. People rely on it more than even during the pandemic and technology stocks have thrived. But several strong dividend-paying sectors rely on the real economy, which is still being hampered by the continuing lockdown restrictions.

 

But things are changing fast.

 

Since the first vaccine announcement in early November, energy and finance have been the best-performing market sectors by far. A vaccine means the end of the pandemic and lockdowns. The end of lockdowns mean a full recovery can take hold. Real economy sectors will benefit greatly.

 

 

It may just be the beginning for these red-hot sectors, as we will likely see a more full recovery take hold in 2021. Many high dividend stocks are still cheap in an expensive market, while many economists are forecasting that 2021 will be the strongest economic growth year in decades.

 

It’s also worth noting that interest rates are ridiculously low. The 10-year Treasury currently yields a measly 0.94%. Investors will have practically no place else to go but dividend stocks to get a decent income. And the best income stocks currently offer great value and newfound momentum.

 

Here are a few good conservative dividend stocks to consider. Continue reading …