Market crises and macroeconomic recessions typically create fertile ground for value stocks to outperform in a recovery.
Income-seeking investors have been frustrated in recent years as US dividend-paying stocks underperformed. But companies that offer strong payouts in a sustainable manner can help investors source surprisingly robust streams of income and equity returns.
Value investing has always been about challenging the consensus—but never more so than today. After several tough years, we’re seeing signs of a value recovery brewing. Yet fresh approaches are needed to capture the potential in today’s complex markets.
Value stocks have underperformed most other styles of investing, as well as the broad market, by a wide margin since the beginning of 2015. We see several reasons why, which point to the catalysts for a potential recovery; we do not think Value is past its prime.