Dividend-Paying Stocks Gain Appeal as Fed Considers Lower Rates

With the potential for lower interest rates on the horizon, Citi Research recommends that investors consider dividend-paying stocks as a supplemental source of income. They anticipate that investors will shift towards companies with consistent dividend payments, as fixed income investments become less attractive. Currently, the S&P 500 dividends have experienced a 5.2% growth. Consensus estimates suggest a further 6.5% growth in 2024, a figure Citi Research believes could be conservative given their 10% earnings growth outlook. Notable companies like Meta and Alphabet have recently announced dividend payments, adding to the growing trend.

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