Who doesn’t love a good dividend deal? With the broader markets looking to stage a comeback after a difficult start to the year (especially when it comes to the major U.S. indices), I do think there’s no sense in waiting around for stocks to revisit year-to-date lows, especially as we get closer to some sort of peace deal between America and Iran. Though it’s impossible to predict the future, I think that playing both sides of the coin is a wise idea.
And if you haven’t yet bought the dip, I do think that continuing to buy on the bounce back might be a wise idea, especially if you have too much cash and investment ideas. At the end of the day, cash seems to be a sitting duck again, as inflation looks to make its return. It’s hard to gauge how much high energy prices are going to nudge the headline inflation number higher for the month of April.
But I’d argue that the opportunity costs with cash are now higher, and that strengthens the case for picking up a few shares of some dividend deals while prices are still somewhat reasonable. Perhaps a modest deal and a good amount of share price momentum is better to get behind than a falling knife with a multiple that’s seemingly too good to be true!
Any way you look at it, I think it’s a good time to be a buyer, especially if you’re a new investor who’s looking for less choppiness and a bit more yield.
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Great-West Lifeco
Shares of Great-West Lifeco (TSX:GWO) just don’t yield as much as they used to (it used to be in the ballpark of 5% or so). Of course, a 3.7% dividend yield is still very respectable, and with fundamentals heating up as well as the dividend growth trajectory, I’d say that there’s no shame in buying the name into strength, especially given the still-low price-to-earnings (P/E) multiple that’s sitting just shy of 16 times.
With a very generous 10% dividend raise rewarded to investors just over two months ago and a few impressive quarterly showings up its belt, I’m starting to think that the underrated insurance juggernaut has what it takes to continue its rally. With the name less than a dollar away from hitting new all-time highs, I’d not be afraid to buy the name as a breakout play.
Looking ahead, I’d look for the U.S. segment, Empower, to really start moving into high gear. As the firm experiences nice capital inflows while continuing to invest in driving further efficiencies, I’d expect shares of GWO to continue impressing investors. Whether you’re looking for a growth surprise based on management capabilities as they optimize fee-based revenue, I wouldn’t look past the name, as Empower really starts to flex its muscles.
In short, the low 0.66 beta and accelerating dividend growth could make for a relatively steady way to ride out the big waves generated by geopolitical woes and AI-driven disruption in software.
