This Sector Is Crushing the Market and Paying Investors
Amanda Heckman|October 1, 2022
“When she was good, she was very, very good… and when she was bad, she was horrid.”
That nursery rhyme popped into my head while I was looking at the top-performing sector in the market this year.
It’s a sector that has gone through some intense boom-and-bust cycles… and is facing an uncertain future…
But this year, it has been very, very good to its investors.
In Demand
The energy sector is having an interesting year, to say the least.
Prices soared as Russia invaded Ukraine earlier in the year and shut off the oil spigot to most of Europe.
This came on top of the already-increasing energy demands created by the world shaking off the pandemic to resume traveling and commuting.
Simply put, these unique circumstances – plus a push for green energy that's way ahead of reality – have kept the energy sector very much in demand… and have contributed to it enjoying record profits.
Manward contributor and Trading Champion Alpesh Patel saw the opportunity earlier this year. In his research service GVI Investor, he made a tactical move in his stock picking to capitalize on the unusual circumstances in energy. (One of his plays locked in 35% gains in just three months!)
And in his Stock of the Week videos, Alpesh has spotlighted nearly a dozen energy stocks that have met his stringent criteria for growth, value and income.
They keep showing up on his radar because, as he told you Monday, “We’re seeing phenomenal numbers. Energy companies are seeing immense momentum and profits right now.”
And their investors are reaping the benefits…
Cash Is King
In the third quarter, companies in the S&P 500 Energy Sector Index paid out $16.4 billion in dividends, up 15% from $14.3 billion in the second quarter.
That’s nice, but here’s what’s really telling about this year… That $16.4 billion was a huge 49% increase over last year’s Q3 payout.
Right now, the Energy Select Sector SPDR Fund (XLE) pays a dividend yield of 3.48%. That’s higher than the Vanguard High Dividend Yield ETF‘s (VYM) 3.2% yield.
The fund is even beating “Dividend Aristocrats” – stocks that have raised their dividends every year for 25 years or more. The yield on the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) is 2.2%.
Record demand… record profits… rising dividends…
Add it all up and you get a chart like this…
While the overall market has struggled – and failed – to fight off inflation, rising interest rates and a host of other economic issues…
The energy sector is defying gravity and rewarding investors.
Amanda Heckman
Amanda Heckman is the editorial director of Manward Press. With unrivaled meticulousness, she has spent the past dozen or so years – give or take a few sabbaticals – sharpening Andy’s already razorlike wit. A classically trained musician and a skilled writer in her own right, Amanda takes an artistic approach to the complex world of investing. Her skill has led her to work with numerous bestselling authors, award-winning financial gurus and – lucky for us – the fine folks at Manward Press.
