Live Markets: Cash-return stocks win back investor favor, leaving megacaps behind

Moderna

18/09/2026 15:51

Main US indexes turn redDow is weakest off ~0.5%, Nasdaq strongest, off ~0.1%
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Euro STOXX 600 index down >1%
Dollar, gold rise; US crude up ~0.9%; bitcoin rallies >5%
US 10-year Treasury yield rises to ~4.99%
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CASH-RETURN STOCKS WIN BACK INVESTOR FAVOR, LEAVING MEGACAPS BEHIND
Companies that prioritize returning cash to shareholders through dividends and buybacks are back in favor with investors this year in a reversal from the past two years, according to a report from Morningstar.
The firm says that its Dividend and Buyback index, which is heavily weighted towards high-yielding sectors such as financial services, energy stocks and consumer defensive companies, gained over 31% from the start of the year through August. 
That has comfortably outperformed Morningstar's US Total Market Index, which is up about 14% for the same period. The last time it beat the broad market was in 2022, Morningstar said.
Shares of companies using cash for dividends and buybacks are winning across sectors, said Dan Lefkovitz, an indexes strategist at Morningstar, including in technology, where legacy firms such as Cisco CSCO.O, Dell DELL.N and Texas Instruments TXN.O are having "monster years." 
Cisco and Texas Instruments offer dividend yields of 1.56% and 2.18% respectively, while Dell offers 0.45%, according to LSEG data. 
Technology firms have contributed to over 15% of the Dividend and Buyback index's growth so far this year, the report published on September 9 showed. 
Dell DELL.N has surged four-fold in 2026, making it the third-best-performing stock on the S&P 500, trailing only data storage firm Sandisk SNDK.O  and Moderna MRNA.O, which have jumped seven-fold and five-fold, respectively. 
The S&P High Yield Dividend index .SPHYDA has climbed about 9.6% so far this year, already on pace for its best performance since 2021. State Street's SPDR S&P Dividend ETF SDY.P tracking this index has jumped 10%.
Among market-leading megacap companies, Nvidia NVDA.O, Apple AAPL.O and Microsoft MSFT.O, with their yearly gains between 2% and 23%, have underperformed the high-yielding stocks. 
Tesla TSLA.O and Amazon.com AMZN.O have never paid a dividend, while Meta Platforms META.O and Alphabet GOOGL.O only began payouts in 2024, offering dividend yields of 0.31% and 0.26% respectively. 
Their relatively low dividend yields, and buyback programs that have not kept pace with their soaring share prices, keep the group out of the Dividend and Buyback index altogether, Lefkovitz said. 
(Purvi Agarwal)
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