The Weekly Profit - High Unemployment Is Good for These High-Dividend Stocks

[Read Online]( [The Weekly Profit] [The Weekly Profit] High Unemployment Is Good for These High-Dividend Stocks By Robert Ross | Oct 21, 2020 Dear Reader, Stocks go up when things are bad. Just look at 2020. COVID-19 pushed US gross domestic product (GDP) down 33% last quarter... the largest quarterly decline since the Great Depression: With so many people out of work, the unemployment rate shot as high as 14.7%. That was also the highest unemployment rate since the Great Depression: Despite the worst GDP and highest unemployment rate in 100 years, the S&P 500 currently sits near all-time highs: Most would see these three charts and scratch their heads. With so many people out of work, how are stocks trading at all-time highs? Turns out, the real head-scratcher would be if they weren't. Here's what I mean by that… [Mauldin VIP]( 150% gain on TDOC in just 8 months 64% gain on HAL in just 4 months 84% gain on VEEV in just 8 months 185% gain on EQ in just 6 months Readers across all Mauldin Economics premium publications have seen incredible profits. [Learn how you can see gains like these for yourself]( with Mauldin Economics VIP! The Stock Market Is (Really) Not the Economy Stocks and the economy are two separate mechanisms. - Stocks are priced based on what investors think will happen in the future—how things will be. - The economy is based on data—how things were. That's why, even as 20.5 million people lost their jobs in April, the S&P 500 saw its best month in 33 years. The unemployment rate—an economic measure—is a lagging indicator. That means the “current” unemployment rate reflects the rate from months prior. Stocks rise even in the face of high unemployment because investors have already accounted for the terrible economic data and are now looking forward. That’s one of the key reasons why annual S&P 500 returns are actually higher during periods of high unemployment: So with unemployment now at 7.9% and trending lower, investors are pushing stocks to all-time highs in anticipation that the worst is over. In other words, trading activity in March predicted what things could look like today. We can learn a lot about the future by looking backward, too. We’ve Seen This Movie Before Back in January 2011, the US economy was reeling from the global financial crisis. After the collapse of the housing market, the unemployment rate was above 9%: While nearly one-tenth of US workers didn’t have a job, the S&P 500 was trading near all-time highs. Not only had stocks rebounded from their 2009 lows, but they were in the early stages of the longest bull market in US history: Back then, just like today, we had investors looking toward the future and seeing one that’s much brighter. I'm not here to predict where employment numbers go from here. But I can tell you about three stocks that are poised to pay you for a good, long time—no matter what the next jobs report says. 3 High-Dividend Stocks to Ride This Trend As history shows, high unemployment is not a recipe for a collapsing stock market. For select stocks, it’s actually a “buy” signal. High unemployment is one of many reasons [I think we’re in the early stages of a secular bull market.]( One that will gain strength as employment returns to pre-coronavirus levels and companies resume firing on all cylinders again. That’s why now is a good time to add high-quality dividend payers to your portfolio. One of my top picks right now is Hewlett Packard Enterprise (HPE). The company is a solid player in [the booming cloud security market.]( The stock has underperformed in 2020. But since HPE’s 5% yield scored an 86/100 on my proprietary Dividend Sustainability Index, this huge dividend isn’t getting cut anytime soon. Next on my list is Walmart (WMT). While most people think of Walmart as a classic brick-and-mortar retailer, Weekly Profit readers know [it’s one of the fastest-growing e-commerce companies in the US](. Walmart grew its e-commerce sales a massive 74% over the last year. And there are few better options than WMT for income investors. Walmart isn't just a dividend payer—it's a Dividend Aristocrat. That is, a company that's raised its dividend for an incredible 47 years in a row. The company pays a modest 1.7% dividend yield, the Dividend Sustainability Index tells me is safe AND set to grow over the longer term. Last on my list is online payments company American Express (AXP). Amex has 114 million cards circulating worldwide. But those are mainly geared toward travelers, so the stock has taken a hit in 2020. However, the [company gets paid every time a cardmember pays a bill]( or makes a purchase, so the long-term picture remains bright. And with a 1.8% dividend yield on a low payout ratio of 25%, it’s perfect for an income investor’s portfolio. Speaking of income investing, I have one more idea for you… Get 12 issues of my Yield Shark income letter… along with 52 weeks' worth of income trades from my In the Money service… PLUS full access to all the stock and economic research that the Mauldin Economics team produces every day that the markets are open. [Click here to join us for a 30-day test drive—risk-free!]( [Robert Ross] [John Mauldin] Robert Ross Editor, The Weekly Profit Also from Robert Ross: [Yield Shark]( [Yield Shark]( Editor Robert Ross zeroes in on high-quality stocks that his proprietary Dividend Sustainability Index and Equity Evaluation System identify as set to deliver a reliable (and rising) income stream for safety-oriented investors. [In the Money]( [In the Money]( Each week, Robert Ross shows you how to use options to generate regular income and go for double- and triple-digit gains in every kind of market. [Watch Robert on YouTube]( [Follow Robert on Twitter]( Share This Article [Facebook]( [Twitter]( [Email]( Share Your Thoughts on This Article [Post a Comment]( Did someone forward this letter to you? [Click here to get]( The Weekly Profit in your inbox every Wednesday. [Read important disclosures here.]( YOUR USE OF THESE MATERIALS IS SUBJECT TO THE TERMS OF THESE DISCLOSURES. --------------------------------------------------------------- This email was sent as part of your subscription to The Weekly Profit. [To update your email preferences click here.]( Mauldin Economics, LLC | PO Box 192495 | Dallas, TX 75219 Copyright © 2020 Mauldin Economics. All Rights Reserved.