The rise of artificial intelligence has distorted stock market valuations, pulling them far from underlying fundamentals. Traders have poured money into AI-related names, driving up prices on the assumption that growth rates will accelerate endlessly without setbacks. This frenzy has left the broader market looking overextended, with the S&P 500 trading at elevated multiples despite uneven economic signals. Yet amid the hype, overlooked quality companies persist - those with solid growth trajectories trading at discounts that scream opportunity.
As investors, we love dividend stocks, especially the ones that have high yields since they provide a steady source of income and improve the total return potential. The total return for any investment includes dividends, interest and capital gains. So as we step into September with the hope of the Federal Reserve enacting an interest rate cut, it is time to focus on the high-yield dividend stocks that can generate more passive income for you since fixed income will be less appealing in a lower rate environment.