We recently compiled a list of the 12 Best Dividend Stocks Under $30. In this article, we are going to take a look at where Energy Transfer LP (NYSE:ET) stands against the other dividend stocks under $30.
Dividend stocks have remained a focal point for investors, especially amid market volatility and the growing need for steady cash flow. Over time, many investors have turned to dividends as a financial cushion for uncertain periods. According to a recent report by J.P. Morgan Wealth Management, dividend stocks are typically priced lower compared to the broader market. Moreover, high-quality dividend stocks tend to be less volatile, experiencing about 80% of the market’s overall fluctuations. This suggests that they offer a more stable investment option while potentially being available at a more attractive valuation.
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This trend has drawn the attention of income-focused investors, leading to an increase in dividend income as a key component of personal earnings. According to a report by S&P Dow Jones Indices, dividend income has grown from 2.68% in Q4 1980 to 7.88% in Q2 2024, highlighting its increasing role as a source of income. The report also pointed out that since 1936, dividends have contributed to more than a third of overall equity returns, with capital gains making up the remainder.
The dividend growth approach has proven effective for long-term investors, as these stocks have delivered solid returns over time. When adjusted for inflation, dividend growth has outpaced rising prices, reinforcing their appeal. A report by WisdomTree noted that from 1957 to 2023, dividends increased at an average annual rate of 5.7%, exceeding inflation by more than 2%. The report also highlighted that dividend reductions were rare, occurring in only six of the past 64 years, and only once dropping more than 5%. In contrast, stock prices declined in 18 of those years, with the steepest drop exceeding 40% and an average decline of over 11%. Stock prices also showed more than twice the volatility of dividend cash flows, as short-term fluctuations are often driven by market sentiment, while long-term value is supported by stable cash flows.
Over the years, US companies have consistently raised or maintained their dividend payouts, reflecting investor preferences. According to J.P. Morgan’s Outlook 2025 report, US profit margins remain strong, hitting all-time highs. In this decade, companies in the broader market have returned nearly 75% of their annual earnings to shareholders through dividends and share buybacks, compared to just 50% in the 2000s. While concerns about the concentration of the index in major tech firms persist, the report forecasts positive earnings growth across every sector in the broader market for 2025, a trend not seen since 2018.