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Dividend stocks with a record of solid Q4 performance, per Bespoke
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 franchises (Brooklyn & Empire) alongside Tabby,” Boss wrote. Coach’s Tabby handbag line is based on the company’s designs from the 1970s, and it’s been a recent hit on social media. He also sees potential upside to the stock’s multiple, along with possible fiscal 2025 revenue and gross margin growth. Bespoke also called out KeyCorp on its list of dividend-payers that have historically had a strong finish in the final quarter of the year. Over the past 10 years, the stock has climbed an average of nearly 15% in the fourth quarter. The stock has a total return of more than 21% in 2024, as well as a dividend yield of nearly 5%. Piper Sandler analyst R. Scott Siefers is overweight on KeyCorp, raising his 12-month price target to $19 from $18 in late September. He detailed a few of his expectations for the bank’s upcoming third-quarter report. “We expect to see [net interest income] continue to expand sequentially as lower-yielding swaps and Treasuries roll off more visibly,” Siefers wrote. He did, however, trim his earnings estimate to 27 cents per share from 33 cents, citing “a slightly tempered 3Q24E fee expectation and a bit higher 3Q24E expense forecast based on management’s comments regarding [year-over-year] growth.” Finally, Bespoke called out BlackRock . Over the past 10 years, the stock has advanced nearly 14% on average in the fourth quarter. Its dividend yield is 2.2%, and the total return in 2024 is about 18%. Last month, Wells Fargo initiated coverage of asset managers and brokers, and it’s overweight on BlackRock. Wells Fargo analyst Michael Brown dubbed the asset manager as “the clear industry leader, producing durable fund flow, revenue, and margin results.” He added that “2025 could finally be the year for fixed income flows,” as the Fed’s rate cuts spurs investors to move toward longer-duration fixed income holdings. “We expect this trend to be particularly meaningful for BLK,” Brown said. Other names that made Bespoke’s list include JPMorgan Chase , Bank of America and potato processor Lamb Weston .
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