“Dividend-paying equities should be a significant part of your portfolio, but you just have to temper your expectations and make sure you’re balancing that risk with a growth-yielding opportunity,” he said. said.
Deunch noted that, during the pandemic, there was a real emphasis on dividend-yielding equities, “and that was the time to be aggressive” because it was one, if not the, best time to buy dividend-yield equities.
“It’s still attractive to have them now. It’s not just buying that generation,” he said. “But the dividend investor needs to balance that dividend yield with the dividend growth areas in the market.”
Dividend growth opportunities aren’t just in one sector, but they’re more stock-specific. Therefore, Dunech urges advisors and portfolio managers to look at a variety of sectors they may not have originally thought about, including industries, to look for the best growth-yielding dividends. He said this is true on both sides of the Canada-US border, but particularly in Canada.
While he noted that most people think of banks, energy, and consumer staples when they think of dividend yields, he encouraged advisors and portfolio managers to look to sectors such as semiconductors or software, because “they are less The yields may be up, but their dividend growth is also exceptional.”