If there’s an upside to a market selloff, it’s that it causes yields on dividend stocks to rise just when the relative safety of dividend stocks is at its most appealing.
It’s been an unnerving time for investors, especially because there’s no simple explanation for the recent drop in stock prices. True, weakness is being led by riskier sectors like technology and biotech (with momentum plays taking a disproportionate share of the selling), but the damage has spread far and wide.
Heck, even the boring Dow Jones Industrial Average has lost nearly 3% from its early April peak.
At the same time, demand for bonds has caused the yield on the benchmark 10-year Treasury to fall sharply. When stocks peaked on April 2, the yield on the 10-year stood at 2.8%. Today, it’s down to 2.64%.
If the market’s mood has been distinctly risk-off, well, at least that gives a lift to the income side of the equity-income equation.
Happily for new money looking to buy dividend stocks, yields are higher than they were a month ago. (Yields and prices on divided stocks move in opposite directions.)
The S&P 500 has lost about 3.5% since early April. That has the yield sitting at 1.99%, up from 1.92% a month ago. True, the yield on the S&P 500 was much higher a year ago at 2.09%, but there are still plenty of stocks offering surprisingly generous dividends.
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 April. (Note: All dividend yields are as of April 14.)