Time to Switch to High Dividend Industrials?

Many investors praise defensive investing. As Warren Buffett’s mentor Benjamin Graham recommended, investing with a margin of safety can be highly valuable in especially inflationary environments. On the other hand, defensive investing in some sectors like Industrials doesn’t usually provide the best returns in bull markets. As markets exit from the recession, it is not surprising to see that the risky Industrial stocks with low dividend yields benefit from the uptrend more than the Industrial stocks with high dividend yields do. However, we believe investors should be cautious of the upcoming inflationary environment. Like Ray Dalio, we are concerned about the Fed’s inflationary monetary policy, and we think investors should pick defensive stocks with high dividend yields in order to protect themselves against inflation and further declines in the market. We compiled a list of the top 30 US industrial stocks. The sector classifications are sourced from Finviz and the... Read more