Dividend income is often overlooked amid gyrations in the stock market. Consider that in 2024, market bulls were boasting about 24%-plus S&P 500 returns. No one was very focused on the broad market index's 1.2% dividend yield. But dividends are an important element of return, and 2025 for a while was bearing that out. Through May, the S&P 500 was up a thin 1.1%; without dividends, there was essentially no returns at all. Of note, dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100%. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. But not all dividends are created equal, though, and it is important to understand the difference between the two main investment categories: high-yield stocks and dividend-growth stocks.

Visa is the largest payment processor in the world. In fiscal 2025, it processed almost $17 trillion in total volume. Visa operates in over 200 countries and processes transactions in over 160 currencies. Its systems are capable of processing over 65,000 transactions per second.

We have different ways of looking at market valuations, and most are signaling that stocks are reasonably valued, but not a bargain. Our Stock Bond Barometer asset-allocation model is indicating that the two major portfolio asset classes are near parity for valuation. The model goes back to 1960 and takes into account real-time price levels, historical growth rates, and forward-looking forecasts of government and corporate fixed-income yields, inflation, stock prices, GDP, and corporate earnings, among other factors. The output is in standard deviations to the mean, or sigma. The mean reading from the model is a modest premium for stocks, of 0.18 sigma, with a standard deviation of 1.07. So stocks normally sell for a slight premium compared to bonds. The current valuation level is a 0.71 sigma premium for stocks, within the normal range. Other valuation measures also show reasonable multiples for stocks. The current forward P/E ratio for the S&P 500 is approximately 21, within the normal range of 15-24. On price/book, stocks are priced at the high end of the historical range of 5.5-1.8, given that tech stocks, with low capital bases, are the biggest component of the market. The S&P 500 dividend yield of 1.08% is below the historical average of 2.9%, but the relative reading to the 10-year Treasury bond yield is 24% compared to the long-run average of 39% and the all-time low of 18% during 1999. On price/sales, the current ratio of 3.3 is above the historical average of 1.8, but well below the 4.0 multiple at the peak of the dot-com bubble. As well, the gap between the S&P 500 earnings yield and the benchmark 10-year government bond yield is 370 basis points, compared to the historical average of 400. Lastly, the ratio of the S&P 500 price to an ounce of gold is 1.7, within the normal range of 1-to-3. The valuation measures suggest to us that the stock market, at record highs, is not in danger of entering bubble territory.

The first-quarter earnings season has been sensational. Many companies knocked it out of the park when delivering earnings and revenue numbers that well beyond expectations. With reports now in from about 96% of S&P 500 companies, earnings have climbed a staggering 29% from last quarter. Information Technology, up 56%, and Communication Services, up 51%, have led the pack. At the bottom are Healthcare, down 3%, and Energy, down 1%. With earnings season essentially over, we have had a chance to look at trends. In particular, we watch for companies that raised guidance as we view that action as a likely catalyst for market-beating returns in the quarters ahead. It's even harder for companies to raise guidance during uncertain economic times, as vision is murky. The following is a partial list of companies in Argus' Fundamental Universe of Coverage where management raised its outlook during the 1Q26 reporting season.