'Boring Is Good': BofA Strategist Favors Dividend Stocks

The S&P 500 Value Index, meanwhile, has risen roughly 7% as growth counterparts traded little changed. Still, the S&P 500 Growth Index is ahead on a year-to-date basis, with a more than 20% advance beating the value benchmark’s nearly 12% gain.

The strategist said she was positive on financial services companies, as regulations have likely peaked for big banks and artificial intelligence tools are driving efficiency gains. She rates utilities and real estate as overweight, citing their dividend yields and protection against inflation.

And despite the pullback in energy stocks, Subramanian said it’s too early to buy the dip. The sector now looks like a “classic value trap” as stock prices fall faster than the pace of downgrades to analyst earnings forecasts, she said.

The strategist is also negative on big-cap tech stocks, rating information technology as underweight due to risks of crowded positioning. Interest rates will likely further pressure the sector as rates are unlikely to fall to pre-pandemic lows, she said.

Savita Subramanian (Credit: Bloomberg)