Published Thu, 10 Sep 2020 11:30:00 -0400 on Seeking Alpha
Seeking AlphaDividend Quick PicksWhen Tech Stocks Fail You, Choose These 5 Undervalued, Low-Risk Dividend AristocratsSep. 10, 2020 11:30 AM ET|| Includes: ABBV, CVX, ESS, JNJ, NOBL, O, QQQ, XOMby: Jonathan WeberJonathan Weber Cash Flow KingdomThe Investment Community where "Cash Flow is King"SummaryTech clearly has been the winner so far in 2020, thanks to positive sentiment. Much of these gains were driven by multiple expansion, not by underlying earnings growth.
This makes tech vulnerable to a pullback in case sentiment shifts. There are several potential catalysts for that.
Moving towards less risky, less expensive, less volatile investments may be a good choice.
Dividend Aristocrats provide several promising candidates and offer above-average income generation capabilities on top of that.
Article Thesis In 2020, tech stocks, including the well-known high-flyers, have been the clear winners. The profited from the work-from-home trend, increased online shopping, and very positive market sentiment. Their valuations, however, have risen to a very high level that may limit further upside.
Headwinds, such as politicians looking into the monopoly status of some of these tech stocks, have weakened the bull case for these companies further. In early September, tech stocks thus were the hardest-hit stocks when equity markets got under pressure again. If sentiment changes to the negative, there would be a lot of further downside potential for these stocks.
Investors may find refuge in quality dividend-paying stocks, such as some of the Dividend Aristocrats, that trade at less expensive valuations than some of the recent high-flying tech stocks.
Tech Has Been The Winner In 2020 Tech stocks, and especially tech mega-caps, have been the winning investment in 2020 by far. Huge corporations such as Amazon (AMZN) and Apple (AAPL) have shown very strong performance over the last 8 months:
Data by YCharts The Nasdaq index (QQQ)... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|JOHNSON & JOHNSON||130.43||21.6||6.03||3.80||2.93|
|ESSEX PROPERTY TRUST||324.02||52.2||6.21||7.80||2.43|
|POWERSHARES QQQ TRUST SERIES 1||193.23||0.0||0.00||1.49||0.78|
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