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Dec. 31, 2021, 7:18 a.m. EST

These dividend-paying companies can help to fade big tech and play a broader economic recovery

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By Steve Goldstein

If 2020 was the year for the stay-at-home stocks, well, 2021 wasn’t. Bloomberg columnist John Authers points out that an investor who shorted the S&P 500 home entertainment stocks and invested in regional malls instead would have returned a hefty 120% gain this year.

So is the recovery story totally done? Maybe not. Need to Know recently examined what an artificial intelligence-driven portfolio manager was doing — shedding big tech names such as Microsoft /zigman2/quotes/207732364/composite MSFT -0.23% , Alphabet /zigman2/quotes/202490156/composite GOOGL -1.34% and Amazon.com /zigman2/quotes/210331248/composite AMZN +0.25% for a more well-rounded portfolio.

Kevin Muir, author of the Macro Tourist blog and a former institutional equity derivatives trader, is expecting what he calls a violent rotation out of large-cap growth into more value-type names in the first quarter. U.S. economic growth is shifting to one driven by the lower end of the wealth spectrum, boosted by fiscal instead of monetary stimulus, which will lead to what he calls a regular, old-fashioned economic expansion. “This means stocks like industrials and other boring companies that facilitate traditional economic growth are what you want to own,” he writes.

But how to do that? There’s an exchange-traded fund, the ProShares S&P 500 Dividend Aristrocrats /zigman2/quotes/208747379/composite NOBL +0.18% , based on an index that limits membership to S&P 500 companies that have raised their dividend for 25 consecutive years. MarketWatch data show the fund’s top sector exposures are industrials, with a 23% weighting, and consumer goods, with 20%, and only 3% exposure to technology.

The opposite, says Muir, of a zero-coupon-like growth stock would be a high-paying stable dividend company. “If you are looking for a way to fade the Top 8 basket dominance, then what better way than owning a bunch of companies that pay regular dividends, aren’t bid to the moon with speculative exuberance, and will participate in the upcoming economic upswing,” says Muir.

The buzz

South Africa reported it has passed its omicron peak without a major spike in deaths from the coronavirus variant.

Israel began administering a fourth COVID-19 vaccine dose, becoming one of the first countries to do so.

The U.K. approved Pfizer /zigman2/quotes/202877789/composite PFE +3.59% ’s oral antiviral Paxlovid to treat COVID-19, following its approval of Merck /zigman2/quotes/209956077/composite MRK +1.59% ’s Lagevrio last month.

The largest operator of IKEA stores says it is planning to hike prices by 9% on average next year.

Exxon Mobil /zigman2/quotes/204455864/composite XOM +0.79% said higher gas prices would lift its fourth-quarter profit by as much as $1.1 billion.

Hunter Douglas /zigman2/quotes/205256050/delayed NL:HDG -0.23% shares jumped 70% in Amsterdam, after 3G Capital agreed to buy a controlling interest in the home furnishing company in a deal valuing it at $7.1 billion.

The markets

It wouldn’t take much for the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.01% to notch its 71st record high of the year, but in the early morning, U.S. stock futures /zigman2/quotes/209948968/delayed ES00 +0.11% /zigman2/quotes/210219788/delayed NQ00 -0.34% were a bit weaker.

Several international exchanges, including in Germany, Italy and Japan, were shut.

Top tickers

Here are the top tickers on MarketWatch, as of 6 a.m. Eastern.

Ticker Security name
/zigman2/quotes/203558040/composite TSLA Tesla
/zigman2/quotes/203755179/composite GME GameStop
/zigman2/quotes/200235402/composite AMC AMC Entrtainment
/zigman2/quotes/204905836/composite NIO NIO
/zigman2/quotes/210598065/realtime DJIA Dow Jones Industrial Average
/zigman2/quotes/210598269/delayed DXY U.S. dollar index
/zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y U.S. 10 year Treasury
/zigman2/quotes/209948968/delayed ES00 E-mini S&P 500 futures
/zigman2/quotes/202934861/composite AAPL Apple
/zigman2/quotes/208160861/composite OCGN Ocugen

Random reads

Billionaire investor Chamath Palihapitiya predicted Visa /zigman2/quotes/203660239/composite V +0.84% and Mastercard /zigman2/quotes/207581792/composite MA +1.19% will be the biggest business losers of 2022 , citing the threat from altcoin projects.

Dancing literally helps to power this building .

It’s going to be so cold for the Winter Classic National Hockey League game on Saturday in Minnesota that the ice will have to be heated .

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.

/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 252.56
-0.58 -0.23%
Volume: 39.02M
May 20, 2022 4:00p
P/E Ratio
26.35
Dividend Yield
0.98%
Market Cap
$1893.24 billion
Rev. per Employee
$1.06M
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/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 2,178.16
-29.52 -1.34%
Volume: 2.44M
May 20, 2022 4:00p
P/E Ratio
19.70
Dividend Yield
N/A
Market Cap
$1456.12 billion
Rev. per Employee
$1.72M
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 2,151.82
+5.44 +0.25%
Volume: 4.95M
May 20, 2022 4:00p
P/E Ratio
51.89
Dividend Yield
N/A
Market Cap
$1091.91 billion
Rev. per Employee
$297,107
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/zigman2/quotes/208747379/composite
US : U.S.: Cboe BZX
$ 87.96
+0.16 +0.18%
Volume: 740,461
May 20, 2022 4:00p
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/zigman2/quotes/202877789/composite
US : U.S.: NYSE
$ 52.47
+1.82 +3.59%
Volume: 31.21M
May 20, 2022 4:03p
P/E Ratio
12.04
Dividend Yield
3.05%
Market Cap
$284.19 billion
Rev. per Employee
$1.17M
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/zigman2/quotes/209956077/composite
US : U.S.: NYSE
$ 93.55
+1.46 +1.59%
Volume: 11.70M
May 20, 2022 4:03p
P/E Ratio
16.74
Dividend Yield
2.95%
Market Cap
$232.88 billion
Rev. per Employee
$799,500
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/zigman2/quotes/204455864/composite
US : U.S.: NYSE
$ 91.86
+0.72 +0.79%
Volume: 28.74M
May 20, 2022 4:03p
P/E Ratio
15.22
Dividend Yield
3.83%
Market Cap
$383.93 billion
Rev. per Employee
$4.96M
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/zigman2/quotes/205256050/delayed
NL : Netherlands: Euronext Amsterdam
174.00
-0.40 -0.23%
Volume: 11,630
May 20, 2022 5:35p
P/E Ratio
16.45
Dividend Yield
0.00%
Market Cap
€6.08 billion
Rev. per Employee
€163,704
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/zigman2/quotes/210599714/realtime
US : S&P US
3,901.36
+0.57 +0.01%
Volume: 3.00B
May 20, 2022 5:03p
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/zigman2/quotes/209948968/delayed
US : U.S.: CME
$ 3,902.00
+4.25 +0.11%
Volume: 2.32M
May 20, 2022 4:00p
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/zigman2/quotes/210219788/delayed
US : U.S.: CME
$ 11,838.00
-40.25 -0.34%
Volume: 794,159
May 20, 2022 3:59p
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/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 663.90
-45.52 -6.42%
Volume: 48.00M
May 20, 2022 4:00p
P/E Ratio
90.09
Dividend Yield
N/A
Market Cap
$734.97 billion
Rev. per Employee
$626,347
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/zigman2/quotes/203755179/composite
US : U.S.: NYSE
$ 95.66
-3.53 -3.56%
Volume: 2.48M
May 20, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$7.57 billion
Rev. per Employee
$500,892
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/zigman2/quotes/200235402/composite
US : U.S.: NYSE
$ 12.03
-1.05 -8.03%
Volume: 41.14M
May 20, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$6.76 billion
Rev. per Employee
$101,458
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/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 16.44
-0.22 -1.32%
Volume: 85.86M
May 20, 2022 4:04p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$26.36 billion
Rev. per Employee
N/A
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,261.90
+8.77 +0.03%
Volume: 498.89M
May 20, 2022 5:03p
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/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
103.03
+0.30 +0.29%
Volume: 0.00
May 20, 2022 4:59p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
2.78
-0.07 -2.29%
Volume: 0.00
May 20, 2022 4:59p
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/zigman2/quotes/209948968/delayed
US : U.S.: CME
$ 3,902.00
+4.25 +0.11%
Volume: 2.32M
May 20, 2022 4:00p
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 137.59
+0.24 +0.17%
Volume: 136.01M
May 20, 2022 4:00p
P/E Ratio
22.36
Dividend Yield
0.67%
Market Cap
$2223.03 billion
Rev. per Employee
$2.51M
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/zigman2/quotes/208160861/composite
US : U.S.: Nasdaq
$ 2.23
-0.01 -0.45%
Volume: 5.20M
May 20, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$483.08 million
Rev. per Employee
N/A
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/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 199.03
+1.66 +0.84%
Volume: 6.96M
May 20, 2022 4:00p
P/E Ratio
32.00
Dividend Yield
0.75%
Market Cap
$410.95 billion
Rev. per Employee
$1.25M
loading...
/zigman2/quotes/207581792/composite
US : U.S.: NYSE
$ 336.18
+3.96 +1.19%
Volume: 3.43M
May 20, 2022 4:00p
P/E Ratio
34.98
Dividend Yield
0.58%
Market Cap
$323.22 billion
Rev. per Employee
$828,667
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