Published Sat, 12 Dec 2020 10:00:00 -0500 on Seeking Alpha
Seeking AlphaDividend Quick PicksValue Shines: 5 High-Yield Income Stocks With More UpsideDec. 12, 2020 10:00 AM ET|| Includes: AROC, EPD, MO, T, XOMby: Jonathan WeberJonathan Weber Cash Flow KingdomThe Investment Community where "Cash Flow is King"SummaryValue stocks have been neglected in many cases during 2020.
A vaccine rollout will hopefully lead to normalization in 2021.
Some value stocks offer an attractive combination of upside potential and above-average dividend yields.
Positive vaccine news from Pfizer (NYSE: PFE), BioNTech (Nasdaq: BNTX), and Moderna (Nasdaq: MRNA) has led to significant gains in beaten-down value stocks over the last month. These stocks, which had seen their shares get ravaged during spring and summer due to the current pandemic, are making a comeback as the market is pricing in a recovery and an end to the pandemic at some point during 2021. There are still many value stocks that continue to offer strong income yields and that have more upside potential over the coming years, however, and we will take a look at a couple of those in this article.
Value Underperformed In 2020
Overall, 2020 has been a solid year for stocks: The Dow Jones (DIA), the S&P 500 (SPY), and the Nasdaq (QQQ) reached new highs this year. The performance of equity investments was very uneven, however, as Growth clearly outperformed Value this year:
Data by YCharts
The growth-heavy Nasdaq has returned 43% year to date, while the other two indices have generated lower returns. The discrepancy is even wider when we compare the performance of the iShares 500 Value ETF (NYSEARCA: IVE) with the performance of the iShares 500 Growth ETF (NYSEARCA: IVW) - the former is up 0.3% this year, while the latter has returned 29% this year, or 100 times the performance of the former.
During the pandemic, investors started to bid up stocks that would benefit from changes such as work from home, more online shopping, etc. Growth stocks such... Read more
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