Often overlooked amid gyrations in the stock market is dividend income, which is an important element of total return. Between 1930 and 2012, dividend income accounted for 42% of total return of the S&P 500, according to Hartford Funds. And that's just the average. In some decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for 15%-20% of returns. Still, in 2018, dividend payments softened the blow when most market indices declined as the Federal Reserve hiked rates. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

The 1Q21 EPS season is mostly in the books, with retailers the last group to report over the next two weeks. The results were impressive -- but came against an easy comparison with last year's 1Q, when the world started to shut down to fight COVID-19. Through early May, Refinitiv reported that S&P 500 earnings rose 50.4% year over year -- the best quarter since 1Q2010. Some 87% of companies have come in ahead of expectations, up from the prior four-quarter average of 76%, according to Refinitiv. Where is the growth? Consumer Discretionary remains atop the list with a 170% earnings increase. Financials is second at 130%. Only Industrials is expected to remain negative -- with a 2% decline. Even the Energy sector, expected to have an earnings decrease at the start of the quarter, is now poised for 8% growth. Our analysts are always on the lookout for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst for strong returns in the quarters ahead. Here are 20 BUY-rated companies in Argus coverage at which management has raised guidance or increased its outlook during the 1Q21 EPS reporting season.

Stocks finished higher on Thursday in a volatile session as investors weighed a new round of 1Q earnings reports along with weekly employment data. The Labor Department reported that first-time jobless claims fell to 498,000, the first drop below 500,000 in the pandemic era and below the consensus forecast. However, continuing claims rose to 3.69 million from 3.653 million and topped the consensus estimate. The data came ahead of the government's April employment report on Friday morning. The Reuters consensus calls for the addition of 978,000 new payroll jobs after an increase of 916,000 in March. The Dow rose 0.93%, the S&P 0.82%, and the Nasdaq 0.37%. Crude oil fell 1% to $65 per barrel, while gold rose $31 to $1815 per ounce.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

April 2021 lived up to its billing as the best stock month of the first half. During April, the S&P 500 appreciated 5.2%, better than any month so far this year; March was closest with a 4.2% gain. Through the end of the fourth month, the S&P 500 is up 11.3% year-to-date.

Stocks fell on Tuesday morning, led by a sharp drop in large Tech stocks. On the economic front, the Commerce Department said that U.S. factory orders rose 1.1% in March, up from a 0.5% decline in February but below the Reuters consensus forecast of 1.3% growth. The Commerce Department also reported that the U.S. trade deficit rose 5.6% to an all-time high of $74.4 billion in March on strong growth in imports. The Dow fell 0.9%, the S&P 1.3%, and the Nasdaq 2.5%. Crude oil traded near $65 per barrel, while gold rose slightly to $1794 per ounce.

Stocks were mixed on Monday morning amid a new round of first-quarter earnings reports and weaker-than-expected manufacturing and construction data. The Institute for Supply Management said that its factory index fell to 60.7 in April, down from 64.7 in March and below the Reuters consensus forecast of 65.0. Meanwhile, the Commerce Department said that U.S. construction spending rose 0.2% in March, up from a 0.6% decline in February but well below the consensus forecast calling for 1.9% growth. The Dow rose 0.9%, the S&P rose 0.3%, and the Nasdaq fell 0.5%. Crude oil traded near $64.50 per barrel, while gold jumped $27 to $1795 per ounce.

This edition features where to look for infrastructure opportunities; the upcoming Berkshire meeting; an earnings roundup; and notes from Sage Group, Caterpillar, and General Dynamics.

Sustainable Impact Investing is gaining traction with the global investment community. In January 2020, BlackRock CEO Lawrence Fink, who oversees approximately $9 trillion in assets, announced that his firm would be investing in companies that are making progress on sustainability. He doubled down in his January 2021 letter, calling on company managements to disclose their plans for making their businesses "compatible with a net-zero economy" by 2050. As assets have flowed in over the past 40 years, Sustainable Impact Investing has evolved. The discipline, originally known as Socially Responsible Investing, focused at first on excluding companies that conducted business in South Africa, or participated in industries such as tobacco, alcohol, and firearms. But the performance of these initial strategies lagged, and the approach has been modified. Now, instead of merely identifying industries to avoid, the discipline promotes "sustainable" business practices across all industries that can have an "impact" on global issues such as the climate, hunger, poverty, disease, shelter, and workers' rights.

With April winding down, you can count on someone, somewhere saying, 'sell in May and go away.' That pronouncement is mainly popular because it rhymes. While it is true that summer is typically a period of relative underperformance, market timing rarely works. And sometimes summer is a good time for stock performance.

Stocks rose modestly on Monday morning at the start of a busy week for 1Q earnings reports, which have thus far been strong. According to FactSet, 84% of S&P 500 companies that have reported 1Q results have topped consensus expectations. On the economic front, the Commerce Department said that core capital goods orders excluding aircraft rose 0.9% in March, up from a 0.8% decline in February but below the Reuters consensus forecast of 1.5% growth. The Dow rose 0.1%, the S&P 0.2%, and the Nasdaq 0.6%. Crude oil traded near $62 per barrel, while gold rose slightly to $1778 per ounce.

We have skirted the issue of sentiment for months as bullish extremes have become even more extreme. Other than some mild pullbacks, we haven't seen anything close to real fear in the stock market since the COVID-19 collapse in early 2020.

Our rating on the Industrial sector is Over-Weight. After enduring the challenges of the pandemic, the cyclical stocks in the sector appear well positioned within the changing political environment. Specifically, we believe that Industrial stocks will benefit from enhanced infrastructure investment and more-lenient trade policies during the Biden administration. The Industrial sector accounts for 8.9% of S&P 500 market capitalization. Over the past five years, the weighting has ranged from 7% to 12%. We think that investors should allocate 9%-10% of their diversified portfolios to the group. The sector includes industries such as transportation, aerospace & defense, heavy machinery and electrical equipment. The sector is outperforming the market thus far in 2021. It underperformed in 2020, with a gain of 9.0%, and slightly underperformed in 2019, with a gain of 26.8%. Here are some of our top Industrial picks, all of which are rated BUY at Argus.

Last week, we talked about short- to long-term bonds based on a daily chart analysis. Stepping back (always good to do now and then) and looking at a monthly chart, we note with awe the (we think) longest bull market in history. Interestingly, Treasury yields tend to move in very long cycles, with the prior run-up in yields lasting from 1946 to 1981 -- when the 10-year rose from about 2% to 16%.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Recent economic data illustrates that conditions are improving, though serious risks remain. The primary driver of GDP over the next few quarters is likely to be the country's physical health, as the nation battles COVID-19. Right now, vaccines are on the way. The employment environment is in better shape than it was nine months ago, though still far from a position of strength (as it had been prior to the pandemic), and consumer confidence is improving. We expect that rising confidence will lead to continued growth in consumer spending. Auto sales have recovered, and the housing market remains strong, even as interest rates tick higher. Businesses are again expanding. Rolling all the data up, our GDP model now calls for a 1.6% increase in absolute GDP in 1Q21 from 4Q20, which translates to an annualized gain of 6.0%. We expect further absolute improvement into 2021. On an annual basis, we look for overall GDP growth of approximately 4.4% in 2021 and 3.6% in 2022. Our estimates are consistent with consensus forecasts and the outlook from the Federal Reserve, which calls for growth of 4%-6% in 2021.