The market swooned in the second half of February and early March, with rising bond yields sparking a volatile rotation from growth stocks to value stocks. Rising vaccination rates and the market's focus on a post-pandemic world also brought some high-flying pandemic stocks back down to earth.

As a result, the past month was much tougher on growth-oriented investors than conservative ones who mainly held defensive dividend stocks. If your portfolio underperformed the S&P 500 during this rotation, you might be holding too many growth stocks and not enough value stocks.

Some growth stocks have recovered since that downturn, but investors might want to consider switching over to some cheaper dividend stocks before the next yield-induced market dip occurs.

A smiling woman looks at a jar of coins and a stack of cash.

Image source: Getty Images.

Let's focus on two stocks that still trade at reasonable valuations, pay dividends that are higher than the 10-year Treasury's current yield of 1.7%, and will generate stronger growth in a post-pandemic world.

1. American Eagle Outfitters

American Eagle Outfitters (AEO -5.61%), one of the few mall-based apparel retailers to survive the retail apocalypse, generated 20 straight quarters of comparable-store sales growth until the fourth quarter of 2019.

That streak abruptly ended when the pandemic hit, and AEO's revenue declined 13% to $3.76 billion in 2020, with a net loss of $209 million. Those declines seem ugly, but AEO's stock has more than doubled over the past six months.

AEO's stock is advancing because Aerie, its higher-growth lingerie and activewear brand, returned to growth over the past three quarters. Its namesake brand also gradually recovered.

Revenue Growth (YOY)

Q1 2020

Q2 2020

Q3 2020

Q4 2020

American Eagle















Data source: AEO quarterly reports. YOY = Year-over-year.

Aerie continues to lure customers away from L Brands' (BBWI 3.36%) Victoria's Secret with its cheaper products and body-positive ad campaigns, while American Eagle remains one of the top apparel brands for U.S. teens, according to Piper Sandler's latest teen survey.

AEO's digital sales across both brands surged throughout the pandemic and partly offset its brick-and-mortar declines. Its digital orders accounted for 45% of its sales for the full year, up from 29% in 2019.

Analysts expect AEO's revenue to rise 22% this year with a return to profitability. It reinstated its dividend payments and buyback plans in early March, it currently pays a forward yield of 1.8%, and the stock trades at just 16 times forward earnings.

2. Tanger Factory Outlets

Tanger Factory Outlets (SKT 1.88%) also survived the retail apocalypse, for two simple reasons: it's a landlord instead of a retailer, and most outlets fared better than traditional malls. As a REIT (real estate investment trust), Tanger is also obligated to pay out most of its profits as dividends to maintain a favorable tax rate.

Two young women go shopping.

Image source: Getty Images.

Tanger's business was fairly stable prior to the pandemic. It ended 2019 with an occupancy rate of 97% at its centers, marking the 38th straight year that key ratio stayed above 95%.

But that streak ended last year as most of its outlet centers shut down during the pandemic. Its tenants struggled to pay their rent, and Tanger allowed them to defer their payments in March and April.

Tanger reopened most of its stores in July, but its occupancy rate still dropped to 91.9% in 2020, and it struggled to collect the rent. But by the fourth quarter, Tanger had collected 95% of its rent payments, and traffic at its centers had rebounded to 90% of its prior-year levels.

Tanger's revenue declined 18% to $390 million for the full year, its core FFO (funds from operations) slid 32% to $154 million, and it posted a net loss. But this year, analysts expect Tanger's revenue to dip just 1% with a return to profitability as the pandemic passes.

Tanger reinstated its dividend in January, and it now pays a forward yield of 4.1%. The stock might initially seem expensive at about 50 times forward earnings, but that P/E ratio was skewed by its past losses and could quickly contract after its profits stabilize again.