Bank of America says the U.S. economy is showing favorable signs for dividend stocks. Savita Subramanian, an equity and quantitative strategist, wrote in a note on Wednesday that the firm's U.S. regime index (economic indicators) posted the largest increase since July 2021 after entering a recovery phase in February. There is. In this environment, investors want to own stocks with dividends above market yields, he said. “High dividend yields have led the economic recovery so far, 88% of the time. This factor remains undervalued and ignored…and once the Fed starts cutting interest rates, they will be the beneficiary of the flow of income investors. “There is a possibility that it will happen,” Subramanian said. When it comes to stock picking, look for companies that comfortably and safely pay above-market yields, Subramanian wrote in a note. Because of these characteristics, she's looking to lower her dividend yield and put her two on the Russell 1000 in her quintile. This includes her second-highest dividend-yielding tranche in the index. Her screen is wary of owning distressed companies that could move into the first quintile, the group with the highest dividend yields, if the stock price declines ahead of a potential dividend cut. . Here are some of the names on Bank of America's April list. AES and Sempra are two power companies that returned 4% and 3.4%, respectively. Utilities are generally known for their predictable dividends. It has lagged the broader market this year, but has made some gains in recent months. The Utilities Select Sector SPDR Fund (XLU) is up 5% year-to-date and 4.9% over the past month. In late February, Sempra CEO Jeffrey Martin told CNBC's Jim Cramer that the company had increased its capital plan to $48 billion to fund initiatives such as power grid modernization. he said. “Our record $48 billion capital plan provides a roadmap for our future growth and should support our utility's rate-based growth of 9% to 10%.” he said on “Mad Money.” Sempra stock is down about 4% since the beginning of the year, and AES is down nearly 10%. Several energy names are also on the list, including APA and HF Sinclair. APA's dividend yield is 3.1%, and HF Sinclair's dividend yield is 3.5%. In January, APA announced a deal to acquire Caron Petroleum in a $4.5 billion all-stock deal. APA CEO John Christman said in an interview with CNBC in February that the deal strengthens APA's “backbone” in the U.S. Permian Basin. APA's stock price has fallen nearly 10% since the beginning of the year, while HF Sinclair's stock has risen about 3% over the same period. Finally, Citigroup was among the financial stocks Bank of America looked at. Citi earlier this month reported better-than-expected first-quarter revenue, helped by better-than-expected results from its investment banking and trading divisions. The stock is up 22% since the beginning of the year.