The surprising result of the presidential election has large implications for dividend stocks. First, let’s stipulate this: As an asset class, stocks that pay dividends always look good. Yes, they compete with fixed income for investors’ favor. True, like bonds, their prices come under pressure when interest rate rise. But whether it’s an up market or a down market, there’s always a place for dividend investing.
The yields on dividend stocks rise when their share prices become depressed. That’s an opportunity to chase extra yield. Besides, the best dividend-paying stocks do their most good when they are held for long periods of time. Ideally, the holding period includes many dividend hikes and market cycles.
On the other side of the coin, if the market is rising — that’s obviously good for all equities. The bottom line is that dividends are always appropriate for long-term investors.
That said, investors need to be cognizant of which way the political winds are blowing. The ascension of Donald Trump to the presidency of the U.S. promises to usher in big changes for a swath of industries. That means certain dividend stocks stand to benefit on a price basis more than others. If they throw off healthy dividends as well, the the total return equation is complete! It’s also important to remember that rising profits allow companies to give more cash back to shareholders.
With these considerations in mind, here are seven dividend stocks poised to generate outperformance with a new president in the White House in 2017.