Dividend Value Stocks Outperform in Market Downturn

Value stocks, including notable dividend growers like Morgan Stanley, AT&T, Cardinal Health, The Gorman-Rupp Company, and The Clorox Company, have shown resilience during this year's market downturn, with the S&P Value Index declining about 9%—a smaller drop than the more than 15% fall experienced by growth stocks. A shift in investor sentiment has seen funds move from high-growth tech stocks to value stocks due to concerns over high valuations and tariff-related risk aversion. Analysts predict first-quarter earnings for value companies will fall by 12% year-over-year, while growth firms could see a 20% increase, but advocates argue subdued expectations are already priced in. Some investors anticipate the trend toward value stocks could continue, as low expectations provide room for positive surprises in upcoming earnings reports. Portfolio managers note that even meeting or slightly beating expectations could yield notable gains for value stocks. Meanwhile, enthusiasm for growth stocks persists, especially those benefiting from artificial intelligence advances.