Dividend Stocks: Midyear Report Card

“Bond like” triple-net REITs have done particularly well. Realty Income (O) and National Retail Properties (NNN) are up 19% and 22% year to date, respectively. Mortgage REITs — one the sectors most sensitive to yield movements — also have had a fantastic first half to the year. The iShares Mortgage REIT ETF (REM) is up 11% year-to-date, not including its gargantuan 15% dividend yield. Looking more broadly, the iShares Select Dividend ETF (DVY), which focuses on high-dividend stocks, is up 10% YTD, easily beating the 7% return on the S&P 500.

The Fed won’t be raising short-term rates for another nine to 12 months at the earliest, and the low forecast for long-term rates, should it prove to be accurate, will make dividend-paying stocks attractive for income investors. My recommendation? Continue to accumulate shares of high-quality dividend stocks on any pullbacks. I expect the 10-year Treasury yield to fluctuate in a relatively tight range of 2.5% to 2.9%. Any selloff of income securities as yields reach the upper bound of this range should be viewed as a buying opportunity.

Source: InvestorPlace

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