Stocks finally started rising again last week, but the market is still down on the year. As worrisome is that is, there is a sliver of a silver lining, at least for income investors: Yields on dividend stocks are going up.
The S&P 500 is off 2.8% for the year-to-date. And before last week’s gains, the main market benchmark was down nearly 6% on the year. But since yields on dividend stocks move in the opposite direction of price, new money can now enjoy more bang for the buck.
Indeed, around this time last month, the yield on the S&P 500 stood at 1.91% . Today it’s up to 1.96%
By the same token, demand for bonds has interest rates and yields on fixed income coming down once again. The yield on the benchmark 10-year Treasury note is sitting around 2.68% these days, down from 2.88% a month ago.
That’s good news for dividend stocks because it makes their yields more competitive when compared to bonds. The downside, of course, is that most dividend stocks are yielding more because prices are down.
But if income is the name of your game, you can get better yields out of dividend stocks today, especially when you look at what yields were doing when the market was notching all-time highs.
The names of the top 10 S&P 500 dividend stocks haven’t changed much since last month, but the yields are a bit higher. To get a sense of what’s out there among high-yield dividend stocks, here are the top 10 S&P 500 dividend stocks for February: