So here’s the tea: Bank of America’s Savita Subramanian just dropped some serious truth bombs about the stock market, and honestly? It’s about time someone said it.
Remember the “Nifty Fifty” from the 60s and 70s? Those were the “buy and forget” darlings that everyone thought would go up forever. Well, guess what? We’re living through Nifty Fifty 2.0 right now, except this time it’s Big Tech and mega-caps hogging all the attention. And according to BofA’s research, this party might be winding down faster than a college kegger when the cops show up.
Here’s the kicker: today’s Nifty Fifty is actually lower quality than the 90s version, but somehow sporting “near record valuations.” It’s like paying Ferrari prices for a Honda Civic – sure, it’ll get you there, but come on.
The smart money is starting to shift. With the Fed likely cutting rates in September and inflation still being a sneaky little troublemaker, Subramanian thinks we’re about to see a “broadening” beyond the usual suspects. Translation: it’s time to look at the wallflowers at the dance.
Here are 5 dividend-paying underdogs that could be your portfolio’s new best friends:
1. BXP Inc. (Boston Properties)
Trading at just 9.3x forward earnings, this REIT owns some seriously prime real estate – think Times Square Tower and 767 Fifth Avenue. While everyone’s panicking about office space, smart money sees opportunity. BofA target: $83.
2. Devon Energy (DVN)
Down 26% from its high but trading at only 8x forward earnings. Yeah, oil’s volatile, but this company doubled its dividend since 2021 and throws in variable payments too. It’s like getting paid to wait for energy to bounce back. Target: $45.
3. Eastman Chemical (EMN)
At 9.3x forward earnings, this specialty materials company is basically the Swiss Army knife of chemicals – they make stuff that goes into everything you use daily. Boring? Maybe. Profitable? Absolutely. Target: $78.
4. Host Hotels & Resorts (HST)
Trading at 8.1x forward earnings, this REIT owns luxury hotels partnered with Marriott, Ritz-Carlton, and Hyatt. If travel keeps recovering (and let’s be honest, people are dying to vacation), this could be golden. Target: $18.
5. Healthpeak Properties (DOC)
Healthcare real estate at 9x forward earnings and trading at a 40% discount to fair value? In an aging population? This is like finding designer jeans at a thrift store. Target: $23.
Look, I’m not saying Big Tech is going to crash tomorrow. But when the music stops, you want to be sitting in a chair that actually pays you to wait. These dividend darlings might not have the sex appeal of the latest AI stock, but they’ve got something better: actual cash flowing into your account while you sleep.
Sometimes the best investment strategy is being the person who leaves the party before it gets weird. Just saying.