October is off to a rocky start, but a strong period of seasonality is only just beginning – particularly for select dividend-paying stocks, Bespoke Investment Group found. "Entering October is the strongest period of the year for three-month returns, and shorter-term returns are also some of the best," the firm said in a report earlier this week. Dividend-paying stocks have been especially strong when it comes to fourth-quarter returns over the past 10 years, Bespoke found.
The firm made a list of 30 dividend-paying S & P 500 stocks, averaging a fourth-quarter gain of more than 11.5% over the past 10 years. In addition to having seasonality in their favor, dividend stocks are also expected to benefit from the Federal Reserve's interest rate cutting cycle.
That's because their dividend yields will seem more attractive to income-seeking investors when compared with the yields on Treasurys. See below for a few of the names that made Bespoke's list. Tapestry made the top of the list.
Over the past 10 years, the fashion name, which owns Coach New York, sees an average jump of more than 17% in the fourth quarter. Its year-to-date total return, which accounts for the reinvestment of dividends, is about 28.3% in 2024.
Tapestry also has a dividend yield of 3%. Late last month, JPMorgan analyst Matthew Boss and his team dubbed the stock an "overweight opportunity." "Driving 1Q upside by our model – our recent fieldwork points to global momentum at Coach behind new product franchis.
