According to Bank of America, the US economy is sending a favorable sign for dividend stocks. In March, the firm's US Regime Index – an economic gauge – posted its biggest gain since July 2021, after it flipped into a recovery in February, equity strategists said. votes and quants Savita Subramanian wrote in a note on Wednesday. In this environment, investors want to own dividend stocks with higher-than-market yields, she said. “High split yields have led 88% of the time in previous rallies,” Subramanian said. This factor remains inexpensive and overlooked… and could be a beneficiary of income investor capital flows if the Fed starts cutting interest rates.” When choosing names, look for companies that pay above-market interest rates in a safe, non-stretched manner, Subramanian wrote in his note. For those characteristics, she looks to the top two of the Russell 1000 with a lower dividend yield. This includes the second highest dividend yielding group of stocks in the index. She protects against owning troubled companies that could fall into the top quintile, the group with the highest dividend yield, if prices fall in anticipation of a potential dividend cut. Below are some names on Bank of America's list in April. AES and Sempra are two utility names that made the cut, yielding 4% and 3.4%, respectively. In general, utilities are known for their predictable dividends. Although they have lagged the overall market this year, there have been some gains in recent months. The Utilities SPDR fund (XLU) is up 5% year-to-date and is up 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 grid modernization. “The record $48 billion capital plan really lays out the roadmap for our future growth and will support rate-based growth at the utilities,” he said on “Mad Money.” Ours is between 9% and 10%.” Sempra shares are down about 4% this year, while AES has fallen nearly 10%. Several energy names are also on the list, including APA and HF Sinclair. APA has a 3.1% dividend yield, while HF Sinclair offers a 3.5% dividend yield. In January, APA announced an agreement to acquire Callon Petroleum in an all-stock transaction valued at $4.5 billion. APA CEO John Christmann said in an interview with CNBC in February that the deal adds to APA's “backbone” in the U.S. Permian Basin. APA shares are down nearly 10% year-to-date, while HF Sinclair is up about 3% during the period. Finally, Citigroup is one of the financial names highlighted by Bank of America. Citi posted a first-quarter revenue beat earlier this month, thanks in part to better-than-expected results in its trading and investment banking divisions. Shares are up 22% this year.