Dividends never go out of favour. Benjamin Graham said, “The true investor…will do better if he forgets about the stock market and pays attention to his dividend returns and to the operation results of his companies”.
While dividends may never lose their appeal, a dividend-paying strategy is more compelling now than ever. For one, a lower rate regime makes dividend-paying stocks increasingly attractive as the traditional avenues for yield fall. Following the Federal Reserve’s (Fed) rate cut in December 2024, the futures market is still expecting further cuts in 2025 – the new Trump administration may slow but not necessarily derail the direction of rates. Companies can also potentially borrow at lower costs, potentially increasing their profitability and ability to maintain or increase dividend payments.
Read Eastspring’s Deep Dive on Asian dividends
