Bank of America says these dividend stocks have a history of outperformance in this environment

There's been a shift in Bank of America's business-cycle metric that is good news for certain dividend stocks. The bank's U.S. Regime Indicator strengthened for the second month in August, confirming a recovery phase, according to equity and quant strategist Savita Subramanian. The indicator, which measures a mix of economic and corporate data, has been moving in and out of recovery since February 2022 amid the volatility in macro signals and inflation uncertainty, she said. Among the strategies that worked during recovery phases in the past is high-dividend yield, she wrote in a note Monday. It relatively outperformed the equal-weighted S & P 500 by an average 5.6% in unconstrained investment styles, which have big sector tilts, and by an average 4.5% in a sector-neutral style, she said.