Hello, YieldAlley readers! In this issue:
The Dividend Champions of 2025
Small-Cap Stocks Hit Records as Core Inflation Cools to Three-Year Low
Tastytrade Brokerage Bonus: 4% Deposit Match Up To $10,000
How Rallying Gold Prices Look
And more!
NEWS
Standout Stories
📈 The Retirement Crisis No One Warns You About: Mattering (WSJ)
⚡️ The 4% Rule Resurgence (Panoptica)
📚 Why Are Credit Card Rates So High? (A Wealth of Common Sense)
🛒 ChatGPT to start showing users ads based on their conversations (CNN)
🏝️ Why We’re All Trading Happy Hours for the Bathhouse (Bloomberg)
MARKET THOUGHTS
Small-Cap Stocks Hit Records as Core Inflation Cools to Three-Year Low
ECONOMY
U.S. core consumer prices rose 0.2% month-over-month and 2.6% year-over-year in December, marking the slowest annual pace since March 2021 and falling below expectations of 0.3% and 2.7%, respectively. Headline CPI increased 0.3% monthly and 2.7% annually. Producer prices accelerated to 3% year-over-year in November from the prior month's 2.8%, driven primarily by rising energy prices. Retail sales beat expectations in November, rising 0.6% versus estimates of 0.4%, though control group sales, which feed into GDP calculations, decelerated to 0.4% from 0.6% in October. Housing market data surprised to the upside: new home sales for October reached 737,000 (SAAR), while existing home sales jumped 5.1% in December to 4.35 million (SAAR), ahead of the 4.18 million estimate. The National Association of Realtors attributed improved conditions to lower mortgage rates and slower home price growth, with the average 30-year fixed rate approaching 6% by week's end.
STOCKS
Equity indexes finished mixed for the week, with small-cap and value stocks extending their year-to-date outperformance over large-cap growth shares. The Russell 2000 and S&P MidCap 400 advanced to all-time highs during the week, while large-cap indexes pulled back from prior week records. Value stocks outpaced growth for the third consecutive week. Fourth-quarter earnings season kicked off with mixed bank results: JPMorgan Chase and Citigroup shares declined after reporting quarterly profit drops, while Morgan Stanley and Goldman Sachs rose on better-than-expected results. Taiwan Semiconductor Manufacturing's strong fourth-quarter profit report boosted AI-related stock sentiment. Political headlines drew attention throughout the week, including President Trump's proposed 10% credit card interest rate cap and 25% tariff on imports from Iran-trading countries. News of a Department of Justice investigation into Federal Reserve Chair Jerome Powell reignited investor concerns about Fed independence.
FIXED INCOME
U.S. Treasuries generated positive returns heading into Friday, with yields fluctuating throughout the week. Short-term yields increased slightly while long-term yields declined marginally. The 2-10 year Treasury spread dipped below 60 basis points during the week for the first time since mid-December. Municipal and corporate bonds outperformed Treasuries as steady investor demand absorbed heavy new issuance. Investment-grade spreads tightened, while high yield market activity remained strong, though energy-related bonds lagged amid oil price volatility and geopolitical concerns.
INCOME BUILDING TIP
The Dividend Champions of 2025
A dividend champion is a company that has raised its dividend for at least 25 consecutive years. Only 146 such companies exist in the US market today. Achieving this status isn't luck. It requires durable earnings power, pricing control, and management discipline through multiple business cycles. These are the businesses I study for potential additions to a dividend growth portfolio. The dividend champions list offers a more complete view than the narrower dividend aristocrats index, which limits itself to S&P 500 members.
H/T to Dividend Growth Investor for maintaining this resource for the community.
The list started 2025 with 146 companies and ends the year at the same count after three departures and three additions. Enterprise Bancorp (EBTC) was acquired. Southside Bancshares (SBSI) and UGI Corp (UGI) failed to raise dividends in 2025, breaking their streaks and falling off the list. Joining the champions in 2025 are Casey's General Stores (CASY), Royal Gold (RGLD), and Southern Company (SO), each reaching 25 years of consecutive increases.
The highest-yielding champions include Altria (MO) at 7.44%, Enterprise Product Partners (EPD) at 6.80%, and Franklin Resources (BEN) at 5.45%. High yields can signal opportunity, but they can also reflect structural headwinds or a declining stock price that pushes yield artificially higher. Altria's 7%+ yield deserves context: while the company faces tobacco regulation and declining cigarette volumes, it has been actively investing in smoke-free products including IQOS heat-not-burn technology and oral nicotine pouches through its investments in NJOY and on! brands. The stock has traded sideways to down over recent years as the market weighs legacy tobacco cash flows against the uncertain path to next-generation products. EPD's energy infrastructure model generates stable cash flow but faces capital intensity and commodity exposure. Franklin's asset management business has struggled with fee compression and outflows. It’s important to note that a high dividend yield alone doesn't mean the company is a must-buy.
The longest streaks belong to American States Water (AWR) at 70 years, Dover Corp (DOV) at 69 years, and Genuine Parts (GPC) at 69 years. These are businesses that have navigated wars, recessions, inflation shocks, and technological disruption while still finding the cash flow to reward shareholders every single year. Over the past 25 years, AWR has delivered an annualized total return of approximately 11.2%, Dover around 10.8%, and Genuine Parts roughly 9.4%.
The list spans sectors from utilities and REITs to industrials and consumer staples. Some champions trade at fair value, others at premiums, and a few at discounts driven by temporary concerns or cyclical headwinds. This is a starting point for finding dividend stocks to add to your portfolio, a curated candidate list of businesses that have already proven their ability to grow through economic cycles.
H/T to Dividend Growth Investor for maintaining this resource for the community.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.41%
SPAXX (Fidelity Government Money Market Fund): 3.34%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.56%
VMFXX (Federal Money Market Fund): 3.63%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.68%
E*Trade: —
Fidelity: 3.65%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.65%
ETFs (30-Day Yields)
SGOV (iShares 0-3 Month Treasury Bond ETF): 3.63%
BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 3.55%
USFR (WisdomTree Floating Rate Treasury Fund): 3.57%
TFLO (iShares Treasury Floating Rate Bond ETF): 3.58%
DEALS AND BONUSES
Tastytrade Brokerage Bonus: 4% Deposit Match Up To $10,000 (12 Month Hold Period)
Offer Details
Main promotion: Open a new Tastytrade account with promo code BIGDEAL and receive 4% of your initial deposit as a bonus (maximum $10,000)
Offer window: Currently available (check Tastytrade website for end date)
Eligibility: New customers only who have never held a Tastytrade account (determined by Tax ID)
Hold period: Deposit amount must be maintained for minimum 12 months
Key restrictions:
Available to U.S. residents ages 18+ only
Non-IRA accounts only (IRA and TRUST accounts excluded)
Not valid for internal transfers between Tastytrade accounts
Promo code BIGDEAL must be entered during account opening
Cannot be combined with certain other offers
Our Thoughts
This 4% match structure differs from the traditional tiered bonuses Tastytrade has offered in the past. The percentage-based approach means larger deposits receive proportionally larger bonuses, maxing out at $250,000 deposited ($10,000 bonus). The 12-month hold period is standard for brokerage bonuses. Consider whether you're comfortable locking up funds for a year and evaluate if the 4% return justifies the opportunity cost versus your alternative investment options. The ability to stack with the $100 referral bonus adds marginal value for smaller deposits.
Picture of the Week
