Skip to main content

How Megacap Tech and Dividend Stocks Contributed to the S&P 500's Gains in 2024


The year 2024 was a remarkable one for investors, particularly those tracking the S&P 500 (SNPINDEX: ^GSPC). Megacap tech companies drove much of the benchmark index’s stellar performance, with their eye-popping double-digit and even triple-digit gains. These tech behemoths, renowned for their innovation and growth, stole the spotlight. However, beneath the glitz and glamour of the tech surge, dividend stocks and certain exchange-traded funds (ETFs) quietly delivered impressive returns, outperforming the index in several cases.

This article explores the dynamics of the S&P 500's 2024 gains, highlights the role of dividend stocks, and delves into why specific stocks and ETFs, including Kinder Morgan (NYSE: KMI), Delta Air Lines (NYSE: DAL), and the Global X MLP & Energy Infrastructure ETF (NYSEMKT: MLPX), continue to stand out as strong investment opportunities heading into 2025.

The Powerhouses of 2024: Megacap Tech Companies

2024 was a year defined by the dominance of megacap tech companies, which include household names like Apple, Microsoft, and Alphabet. These companies not only delivered exceptional returns but also demonstrated resilience in a challenging macroeconomic environment. Several key factors contributed to their performance:

  1. Innovation and Growth: Companies in this space introduced groundbreaking technologies, expanded into new markets, and capitalized on trends like artificial intelligence, cloud computing, and electric vehicles.
  2. Economic Tailwinds: While inflation and interest rates remained concerns, megacap tech firms managed to outpace the broader market by leveraging their scale, efficient operations, and substantial cash reserves.
  3. Investor Confidence: The tech sector’s historical ability to weather downturns and generate long-term returns made it an attractive choice for investors seeking growth.

Despite their outperformance, it’s essential to acknowledge that dividend-paying stocks and ETFs were not left behind. While their returns were less dramatic than those of megacap tech, they played a critical role in providing stability and consistent income to investors.

Dividend Stocks: Steady and Reliable Performers

Dividend-paying stocks often appeal to investors seeking income, stability, and lower volatility. In 2024, several dividend stocks not only matched the broader market's gains but surpassed them. This was particularly notable given the rising interest rate environment, which can dampen the appeal of dividend-yielding investments.

Why Dividend Stocks Thrived in 2024

  1. Attractive Yields: With interest rates hovering near historical norms, dividend-paying stocks remained a compelling choice for income-focused investors.
  2. Resilience in Uncertainty: Dividend stocks typically belong to established companies with predictable cash flows, making them appealing during market volatility.
  3. Sector Strengths: Key sectors like energy, utilities, and consumer staples—which often host high-dividend payers—benefited from favorable macroeconomic trends and robust consumer demand.

Let’s explore three standout dividend investments from 2024 that are poised for continued success in 2025: Kinder Morgan, Delta Air Lines, and the Global X MLP & Energy Infrastructure ETF.

Kinder Morgan (NYSE: KMI): A High-Yield Dividend Opportunity

Performance in 2024

Kinder Morgan, one of the largest natural gas midstream companies in the U.S., delivered an exceptional performance in 2024. The stock gained 55% for the year, fueled by strong demand for natural gas and a robust project pipeline. Despite its impressive run, Kinder Morgan remains attractively valued, with a forward dividend yield of 4.1%.

What Makes Kinder Morgan a Strong Pick for 2025?

  1. Extensive Infrastructure: The company operates approximately 66,000 miles of natural gas pipelines, transporting about 40% of the natural gas consumed in the U.S.
  2. Long-Term Contracts: Kinder Morgan’s reliance on long-term contracts provides predictable cash flows, enabling effective planning for capital expenditures and dividend payments.
  3. Debt Reduction: The company has strategically reduced its leverage by 26% since 2016, further strengthening its financial position.
  4. Growth Potential: With $5.1 billion in projects in its backlog, including $3.6 billion in natural gas projects, Kinder Morgan is well-positioned for continued growth.

For income-focused investors, Kinder Morgan represents a stable and high-yielding option in a market where income generation remains a priority.

Delta Air Lines (NYSE: DAL): Ready for New Heights

Performance in 2024

Delta Air Lines was another standout performer in 2024, benefiting from a robust recovery in the airline industry. The stock surged as travel demand soared, driven by strong consumer spending and a return to pre-pandemic travel patterns.

Why Delta Remains a Solid Bet for 2025

  1. Revenue Diversification: Delta’s partnership with American Express is a game-changer, boosting loyalty and creating a steady stream of revenue beyond ticket sales.
  2. Debt Reduction: The airline has significantly reduced its debt burden, cutting total debt nearly in half since 2022. This improves its financial stability and positions it for long-term growth.
  3. Valuation: Despite its strong performance, Delta’s stock remains undervalued, with a forward P/E ratio of just 8.2.
  4. Modest Dividend: While its 1% dividend yield is relatively low, Delta offers a compelling mix of growth potential and financial discipline.

Delta is an excellent choice for investors looking to capitalize on the ongoing travel boom and the airline’s ability to adapt to changing economic conditions.

Global X MLP & Energy Infrastructure ETF (NYSEMKT: MLPX): A Dividend ETF with Strong Momentum

Performance in 2024

The Global X MLP & Energy Infrastructure ETF outperformed the S&P 500 in 2024, delivering a total return of nearly 43%. This ETF invests in master limited partnerships (MLPs) and energy infrastructure companies, making it an attractive choice for investors seeking high yields and exposure to the energy sector.

Why It’s Poised for Success in 2025

  1. High-Yield Portfolio: The ETF boasts a dividend yield of 4.3%, making it a reliable income generator.
  2. Sector Strength: The energy sector remains robust, supported by growing demand for natural gas and oil exports.
  3. Fossil Fuel Resilience: While the energy transition is underway, the market has reassessed the role of natural gas as a transitional fuel, boosting the outlook for midstream companies.
  4. Top Holdings: The ETF’s largest positions include high-quality companies like Enbridge, Williams Companies, and Kinder Morgan, which are leaders in their respective niches.

The Global X MLP & Energy Infrastructure ETF offers a balanced approach to capturing income and growth in the energy sector, making it an excellent addition to any diversified portfolio.

Conclusion: Balancing Growth and Income in 2025

The S&P 500’s remarkable performance in 2024 was undoubtedly driven by the unparalleled gains of megacap tech companies. However, dividend-paying stocks and ETFs proved their mettle by delivering strong returns and providing a steady income stream. As we move into 2025, investors should consider balancing their portfolios with a mix of growth-oriented tech stocks and income-generating dividend investments.

Kinder Morgan, Delta Air Lines, and the Global X MLP & Energy Infrastructure ETF represent compelling opportunities for those seeking a combination of stability, income, and growth. Whether you’re an income-focused investor or a growth enthusiast, these investments offer the potential for strong performance in the year ahead.

By diversifying across sectors and asset classes, investors can position themselves to navigate market uncertainties while capitalizing on the opportunities that 2025 has to offer.

Labels:

Comments

Post a Comment

Popular posts from this blog

Nebius: A 10x AI Growth Story Still Flying Under Wall Street’s Radar

In the world of explosive AI growth stories, few companies combine the stealth, ambition, and scale of Nebius Group N.V. (NASDAQ: NBIS). While Wall Street fawns over the Magnificent Seven and scrambles to understand how OpenAI, Anthropic, and others fit into the commercial AI puzzle, Nebius is quietly building a European AI infrastructure empire—and it’s about to cross the Atlantic. Despite a 20% decline in the stock since February 2025, the company is arguably one of the most compelling under-the-radar growth stories in AI today. If you're a long-term investor searching for the next 10-bagger hiding in plain sight, this one deserves your attention. The Dip Isn't the Story—The Growth Is Let’s begin with the obvious: Nebius stock is down 20% from its recent high. For most momentum chasers, that's a red flag. But the market correction has been broad-based, with the S&P 500 itself in the throes of a selloff sparked by political uncertainty and concerns over rates. Th...
Post a Comment
Read more

Supercharge Your Retirement With Income Machines Paying Fat Dividends

Retirement planning can be a daunting task, but building a portfolio filled with reliable, high-yielding dividend stocks and funds can make it significantly easier. Instead of relying on the traditional 4% rule, where you gradually sell assets to fund your retirement, you can live off dividends indefinitely, preserving your principal while enjoying a steady income stream. By focusing on investments with strong, durable business models, robust balance sheets, and dividend growth that outpaces inflation, retirees can achieve financial security and even benefit from market downturns by reinvesting excess cash flow. In this article, we’ll explore six income-generating investments—three funds and three individual stocks—that can help supercharge your retirement. Fund #1: Schwab U.S. Dividend Equity ETF (SCHD) SCHD is a go-to dividend growth ETF with a well-balanced portfolio of 101 high-quality companies. While its 3.6% dividend yield may be on the lower end for some retirees, its consisten...
Post a Comment
Read more

Higher High, Lower High; AMD Is A Buy

In the ever-volatile world of semiconductors, Advanced Micro Devices (NASDAQ: AMD) (TSX: AMD:CA) is showing all the hallmarks of a classic breakout opportunity—one that savvy investors would be wise not to overlook. Despite a near 50% pullback from its peak, AMD's fundamentals have never looked stronger. And while investor sentiment has temporarily soured, the underlying growth momentum tells a completely different story. We’re witnessing the convergence of a rare market anomaly: robust fundamentals + depressed valuation = opportunity. This is a textbook “higher high, lower high” setup in technical and sentiment terms—when a strong company’s fundamentals climb higher even as its stock price dips lower. Eventually, these two trends reconcile, and when they do, patient investors often see outsized gains. Table of Contents AMD: From Hero to Underdog—Again Unpacking AMD’s Growth Narrative Why the Momentum Is Not Just Sustainable—But Accelerating The Market Is Pricing AMD ...
Post a Comment
Read more