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We recently published a list of the 10 Best Value Dividend Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Bank of America Corporation (NYSE:BAC) stands against other best value dividend stocks.
Dividends, though sometimes underappreciated, have significantly contributed to long-term investor gains. Between 1960 and the end of the previous year, reinvested dividends and the effects of compounding accounted for about 85% of the S&P Index’s total return. Dividend-oriented strategies offer the advantage of steady income, improved portfolio stability, and a potential buffer during uncertain economic periods—making them a strong choice for all-weather portfolios.
With ongoing tariff tensions in the US adding to market volatility, many investors have begun favoring dividend-focused approaches to strengthen their portfolios. After a stretch where growth stocks took center stage, dividend investing has started to regain traction. According to a report by Franklin Templeton, US-listed dividend ETFs recorded average monthly net inflows of nearly $3.3 billion during the six months leading up to January 31, 2025—up sharply from just $107 million during the same period a year earlier.
Given the uncertain global environment, investors have increasingly leaned toward more reliable components to maintain portfolio balance. Dividend-paying stocks—particularly those backed by strong fundamentals—have emerged as a preferred option due to their ability to generate stable and predictable cash flows. Since these cash flows play a central role in equity valuation models, determining the intrinsic value of dividend stocks typically involves less uncertainty compared to valuing growth-oriented equities. As a result, such stocks are seen as a stabilizing force within a diversified investment strategy.
According to analysts, the strength of dividend-paying stocks lies in their capacity to cushion portfolio losses during market downturns while still providing a meaningful upside. Historically, dividend strategies have shown defensive qualities across different regions and time periods. Data for the three-year span ending December 31, 2024, revealed that dividend stocks experienced lower volatility and smaller maximum drawdowns than the broader market in global, US, and European segments. Notably, when concerns over inflation and rising interest rates resurfaced in August, dividend stocks proved more resilient than their growth-focused counterparts.
Historically, income-focused investing often leans heavily toward value stocks, as investors typically look for companies offering high dividend yields and lower valuation multiples. However, a report by S&P Dow Jones Indices points out that the Dividend Aristocrats Index strikes a balance between both value and growth characteristics. Since 1999, the index has maintained an average composition of roughly 60.5% value stocks and 39.5% growth stocks, showing no consistent bias toward either investing style. Analysts maintained that a portfolio combining strong dividend yield, consistent dividend growth, and resilience in payouts should always remain relevant. They noted that even without relying on market revaluation, the combination of income and income growth could support projected nominal gross returns exceeding 10% annually.