In a market characterized by volatility, particularly among artificial intelligence stocks and rising Treasury yields, Michael Clarfeld points out that many investors are missing out on promising dividend-paying stocks. The S&P 500 recently reached a record high of 7,798.99, yet the market remains heavily concentrated in mega-cap technology firms.
Clarfeld, who manages the ClearBridge Dividend Strategy Fund and the Franklin ClearBridge Enhanced Income ETF, notes that while these funds have slightly underperformed the S&P 500 this year, they still present opportunities for investors willing to look beyond the tech sector.
He identifies two categories of overlooked stocks: 'pedestrian' companies that are high-quality businesses and 'tangential' names affected by AI concerns.
Among his recommendations are The Williams Companies, which has a 2.98% yield and is well-positioned for growth due to increasing natural gas demand, and Unilever, yielding 3.46%, which is experiencing robust organic growth in a challenging consumer staples market. Clarfeld also mentions Automatic Data Processing, which offers a 2.42% yield and is considered resilient against AI disruption.
Overall, Clarfeld advises investors to remain diversified and consider these overlooked opportunities as the market dynamics evolve