These are the dividend stocks that will hold up in a weakening economy in 2024, says this highly rated money manager

Do you expect the U.S. economy to slip into a recession next year? If so, you might also expect a reversal of this year’s stock-market rally. Stocks of quality dividend payers that can keep raising payouts might hold up well in that scenario, according to John Bailer, deputy head of equity income at Newton Investment Management North America, a subsidiary of Bank of New York Mellon Corp.

Bailer co-manages the BNY Mellon Income Stock Fund, which is rated four stars (out of five) within Morningstar’s Large Value fund category. During an interview with MarketWatch, he named three examples of quality dividend stocks held by the fund.

The Federal Reserve’s change in monetary policy during 2022 led to a rapid increase in interest rates and an 18.1% decline for the S&P 500 SPX that year. (All investment returns in this article include reinvested dividends.) But the BNY Mellon Income Stock Fund’s Class M shares MPISX returned 4.4% during 2022 and its Investor shares MIISX returned 4.3%. Those fund returns were after annual expenses, which come to 0.83% of assets under management for Class M and 1.08% for the Investor share class.