As a Money Morning Member, you'll get our top financial news stories delivered straight to your inbox – every weekday morning.
Cancel at any time | How it works
Welcome to Money Morning - Only the News You Can Profit From.
Private Briefingwith WILLIAM PATALON III, Executive Editor
Ask any of our gurus for advice on how to survive a stock-market sell-off – or even a whipsaw period like the one we’re navigating now – and you’ll get a surprising answer.
Keep a shopping list ready, they’ll tell you…
Click here to get exclusive access to our experts' 4 Best Spin-off investments.
Members log in:
Not a member yet? Sign up here or learn more.
Chief Investment Strategist
33-year seasoned market analyst and professional trader with highly accurate track record. Specialty in global markets.
Global Energy Strategist
35-year expert in oil and gas policy, risk assessment, and emerging market economic development.
Capital Wave Strategist
30-year CBOE trader, market maker, and retired hedge fund honcho. Helped launch the Volatility Index in 1993.
20-year commodity guru and portfolio advisor. Top authority on metals + mining stocks. Head- quartered in Canada.
Defense + Tech Specialist
30-year veteran of tech markets with a Rolodex of Silicon Valley CEOs. Pulitzer nominee. Uncovered rare earths crisis.
30-year veteran analyst of business, economics, and financial markets. Award-winning author of "Contrarian Investing."
Near-zero interest rates have lots of savers clamoring for yield and plunging into dividend stocks.
Compared with paltry yields on a bevy of bonds, dividend stocks - especially those with the potential of capital appreciation - have become progressively more attractive to income-seeking investors.
Now's a good time to hunt for dividend stocks, as more companies increase payouts. Dividend payments grew sharply in Q4 2012, with 1,262 dividend increases reported, a 94.5% gain over the 649 increases in Q4 2011, according to S&P Dow Jones Indices.
And rich dividend payments are expected to continue among companies flush with cash since
they have curtailed expansion and investment amid growing global uncertainty.
In fact, more than 5,000 analyst estimates compiled by Bloomberg News forecast that companies in the MSCI World Index will boost payments by 3.8% to a combined $39.43 a share this year, up from a low of $29.58 in 2009.
Historically, dividends have represented a significant percentage of total investment returns. Since 1930, dividends have accounted for more than 40% of total stock market returns.
And dividends can grow. Over the past 25 years, dividends paid out by S&P 500 companies have grown at a compounded rate of 3.2%.
"If you buy some quality equity, you can buy the dividend and get some dividend growth with it," Jacob de Tusch-Lec, who helps oversee $19 billion at Artemis Investment Management LLP, told Bloomberg. "With bonds, you are not protected against inflation, you are selling any upside and you are not getting any income growth. Investors have been going lower and lower down the risk curve to get yield, but at one point, some of those credit assets are no longer much safer than equities."
Dividend stocks also tend to hold up better in rocky markets. In the calamitous year of 2008, equities that paid dividends on average shed 39% on a total-return basis. Non-dividend-paying stocks lost 45.4%.
But buying dividend stocks simply based on hefty dividend yield is never prudent. That's why we put together the following 10 dividend stocks to buy now.
(After submitting your email address the page will refresh with the full article. You will receive a welcome email from Money Morning including the benefits of your free subscription.)