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As equity investors start to look forward to a post-vaccine world, it might be a good time to buy dividend stocks, according to Ned Davis Research.
The firm said in a note on Tuesday that dividend stocks performed in a unusual way during the coronavirus recession, trailing non-dividend payers during both the market decline and the rebound. Normally dividend stocks are a safe haven during times of a recession and market volatility, but in this case the coronavirus pandemic hit key dividend payers like REITS and banks while rewarding internet stocks which don't pay a dividend.
That atypical pattern has put dividend stocks at an extremely oversold position.
"The bottom line is that Dividend Payers are exiting the worst phase of the bull market cycle relative to Non-Payers in their most oversold state in a decade," the note said.