When picking dividend-paying stocks to stabilize your portfolio in tumultuous times, don’t just go for higher yields — look for the growers, according to Morgan Stanley. “Dividends provide a positive return cushion with a notable portion of outperformance for payers versus non-payers coming during periods of market volatility,” the investment bank noted in a recent report. Dividend-paying stocks have outperformed nondividend payers across all large-cap sectors going back to 2000, except for consumer discretionary, Morgan Stanley said. In addition, dividend growers outperform over time, while high-yielding stocks can be volatile. These income providers will be even more important for investors as the economy contends with an economic backdrop where inflation remains elevated but is declining. To that end, Morgan Stanley’s analysts culled a list of top picks from within their coverage. See below for a few.
