Posted by BM on April 1, 2021
In this March 26, Globe and Mail article the author addresses the theory that as interest rates rise dividend stocks drop. https://www.theglobeandmail.com/investing/education/article-dont-let-rising-rates-derail-your-dividend-plan/
“But Brian Belski, chief investment strategist with BMO Capital Markets, has come to a different conclusion after examining 30 years’ worth of data: Even as some dividend stocks struggle when rates are rising, companies that regularly raise their dividends have historically outperformed the market during such periods.”
Our good dividend growers seem to be immune from such myths.
“Rising rates are not a dividend-growth-stock killer, Mr. Belski concluded. Companies that are able to continue paying or even increase their dividends during challenging times are the epitome of high quality and stability, in our view.”
The article goes on to quote other studies that back this up showing that declines in dividend growth stocks triggered by rising interest rates are often only temporary.
The author uses Fortis Inc. (FTS) as a recent example of this behavior in the first week of March when rates were rising. The stock has rebounded nicely off its lows since.
It pays to have a ‘List’ of good dividend growers handy so that when buying opportunities arise you are confident in ‘pulling the trigger’.
