I wanted to write a short form post regarding the ebbs and flows of the stock market and – particularly – how dividend investing has prevailed! They perform well during good times and perform EVEN BETTER during bad times!
Dividend Investing Is Winning
First, we have to talk about the Dividend ETFs of SCHD and VYM.
SCHD is up YTD 9.77%
VYM is up YTD 0.65%
S&P 500 is down YTD 7.14%
Therefore, SCHD is outperforming almost 17%, VYM is out performing over 7%. The top companies in many of the dividend ETFs are oil and gas and they are doing very well this year.
Why, though, is Dividend Winning? Safety. Dividend stocks, and ETFs, provide a safety net for investors. When the dominoes start falling, investors go risk off and move to lower risk assets, such as Dividend Stocks and ETFs. It’s as simple as that. Who would have thought that tech giants such as NVIDIA, Microsoft, Tesla, Meta, Amazon and the like couldn’t trade at 50 to 100 times earnings forever?!
Exactly. Frothy valuations, concerns with AI taking down the software companies and the capital expenditures that the Mag 7 are taking on, is bringing down the majority of the stock market. For reference, the Mag 7 made up 35%-45% of the S&P 500, keep that in mind! If you buy Vanguard’s VOO, like I do daily, you are buying a good chunk of the Mag 7.
How about our Top 5 Foundation Dividend Stocks?
Top 5 Foundation Dividend Stocks 2026 YTD Performance
If you don’t know already, we issue and discuss our Top 5 Foundation Dividend Stocks often. They are composed of 5 names: ConEd (ED), McDonald’s (MCD), Pepsi (PEP), Johnson & Johnson (JNJ) and Procter & Gamble (PG).
The 5 foundation stocks are dividend aristocrats, over 25 years of consistently growing dividends, and many of them are Dividend Kings, which represents 50+ years of consistent dividend increases.
Here is how each stock is performing:
1. Consolidated Edison (ED): The large utility player is up 11.69% YTD.
2. McDonald’s (MCD): The massive consumer giant, serving fast food around the world is up only 0.87%, still outperforming the market, but high price concerns has kept the stock price flat in 2026.
3. PepsiCo (PEP): The global beverage and snack giant is up 7.60% this year, but at one point they were up almost 20%. What a comeback so far in 2026 for Pepsi!
4. Procter & Gamble (PG): The consumer behemoth, representing almost one item in each and everyone’s cupboard or bathrooms. The stock is only up 0.65%, but they are down $25 from just a month or so ago, therefore – were up closer to that 20%+ earlier this year, similar to PepsiCo.
5. Johnson & Johnson (JNJ): Ah, yes, the dividend king of kings. The good old reliable. The stock is up a blistering 16% for the dividend growth jewel. What a great Year and last 18 months they have had!
Dividend investing going forward
What does that mean going forward? Keep the foot on the gas, continue to find undervalued dividend stocks.
I, for one, buy VYM weekly, VOO and VIG daily. Bert buys SCHD every single week as well. We aren’t stopping the dollar cost average approach to positions.
Also, for those that are also getting stung by the software-pocalypse, you can start to acquire shares, too. Look at Microsoft (MSFT), Google (GOOGL), Meta (META), Sales Force (CRM) and a few others!
How about you? Feel good as a dividend investor in 2026? Loving all of the hard investing you’ve done over the years, really paying off? How are you investing this year?
As always, good luck and happy investing.
-Lanny