Mar 12, 2023
Sequence of Recessions & Slowdowns | Dividends Make a Comeback?
Jay Pestrichelli, CEO of ZEGA Financial, joins Derek Moore again to discuss markets going higher even when earnings decline post bear markets. Plus, they discuss Michael Kantro’s HOPE graph showing the order of slowing in the economy through the lens of Housing, New Orders, Profits, and Employment. Then they move on to the drivers of returns talking through PE multiples, margins, revenues, buybacks, and dividends. Speaking of dividends, are they going to be the next big thing if investors believe markets may trade flat for a while? Finally, Jay and Derek give some recommendations that may or may not be good.
Percentage of total stock returns dividends historically make up
Examining prior 1 year forward stock returns after bear market low is in vs. earnings declines
HOPE or Housing, Orders, Profits, Employment, and typical cycles from slowdown to expansion
How dividends plus premium (covered call) selling may augment returns in flat markets
Where market returns come from…