Dividend names have had a strong 2026 so far this year. What could this mean as we move into the year and how can you take advantage of it?
The Nasdaq Dorsey Wright team presents our "Weight of the Evidence" for 2026 linked here. This document explores the current technical pictures across the investable world, highlighting notable changes you need to be aware of ahead of what will undoubtedly be a busy 2026. Note, this document has been approved for Financial Professionals and Non-Professionals alike, so feel free to share with clients as you see fit.
Dividend names have left much to be desired over the last few years. As you would expect during a stout bull market, dividend representatives have lagged behind major domestic indices since the start of 2023. SCHD has gained just 26.55% since 12/31/2022, including dividends… a metric that hardly compares to the >80% sole price return for the broader S&P 500 SPX (nearly 90% including dividends). All this to say, those looking for dividend representation within their portfolio certainly don’t feel like a cash flow machine….and it’s safe to say for many the broader dividend factor is on thin ice for many heading into 2026.
Despite the general underperformance over since the beginning of the 2020’s, the start of the new year has been rather kind to the dividend space. Up just under 3.5% through 1/12, performance for an Invesco high dividend representative PEY is the 4th best opening to a year dating back to 2000. It goes without saying that a mere 12 days of a calendar year are by no means a significant predictor of the rest of the year, but it is at least conversationally interesting to observe historical trends after “strong starts”. The table below details each yearly return for PEY since 2012. There have been five total instances during which the fund opened up the year up more than 3% (not including 2026). In those years, PEY continued to advance for an additional 7.9% for the rest of the year (1/13-12/31) compared to the overall of 5.39% over the entire period. Point being, there does seem to be some weight to the idea that a strong full year typically starts off with a productive open. Note that full year returns do not include dividends in our table.
PEY maintains a poor fund score but does present quite an interesting technical picture as we open up 2026. While it only earns a 1.10 fund score, it reversed back up into X’s on its default P&F chart to challenge its negative trend line at current levels. A second consecutive P&F buy signal at $22 would mark the funds highest point since late 2024 and the first pair of consecutive buy signals since early 2022. Of course, there is a range of resistance in the low $20’s interested parties need to be aware of and we would like to see further technical improvement before calling the fund “strong” by any means.
With the understanding that many dividend focused funds have yet to establish strong technical pictures as we open up 2026, it may suit many of you to go out and search for strong names underneath the hood of broad representatives. To do so, you can utilize NDW’s security screener. For those of you with access to NDW’s new AI screener, you can utilize the following prompt to screen for technically acceptable dividend stocks that have advanced so far in 2026.
“Look that the holdings of SCHD and PEY and screen for stocks with 4 & 5 technical attribute points that have gained 3% or more so far YTD”
For those of you without the AI screener (or still wanting to utilize the old screener) you can run a similar screen by following the directions below. Note, the “old” screen doesn’t allow you to filter stocks by YTD performance, so simply organize the 24 results based on YTD performance when viewing the results to see which names have moved the highest so far this year. For those of you looking for the "original screener" via the new tool, look in the top right under the search bar. The old screener and all your saved screens will be present here.
It is important to remember that dividend names remain laggards based purely on their long term strength. Despite this, action so far in 2026 has been productive, giving us something worth watching throughout the upcoming year. Remember, utilize the overarching technical attribute score when looking for direction as you search for positions.
