Goldman Says These Dividend Stocks Will Do Well Even With the Fed Hiking Rates

Rising interest rates are usually the kill shot for dividend stocks. But there’s a category of high-yielding equities that have ducked it. It’s companies with big dividends that are also projected to raise them, according to data compiled by Bloomberg and Goldman Sachs Group Inc. Such stocks have surged more than 30 percent since the start of July, beating the S&P 500 Index by the most in eight years over any comparable period.

Goldman Sachs Dividend Growth Basket contains 50 stocks with a median expected 2017 dividend yield of 2.6%; the firm expects they’ll raise their dividends by an average of 12% in 2017. The basket has outperformed the S&P 500 by 10 percentage points since the start of July. That trailing spread reached 11.9 percentage points on March 15, which was the widest for any 8 1/2-month period since 2009: Bloomberg data. Companies in the index (as of March 17): VFC, IPG, WHR, HD, LOW, PHM, MO, RAI, ADM, CVS, MJN, VLO, PSX, MPC, TSO, LM, HBAN, KEY, MMC, MS, BEN, UNM, ABBV, PFE, AMGN, CAH, MDT, ABT, DGX, BA, NLSN, ITW, HON, IR, CSCO, XRX, HPQ, IBM, TXN, MSI, MSFT, GLW, ADP, HRS, AAPL, DOW, EXR, VZ, NEE, EIX.

Source: Bloomberg

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