Best stocks to buy for the week ending Sept. 5, 2014:Last week for Money Morning Members, we highlighted seven stocks - five of which hail from the profit-rich tech sector.
Most people invest in companies hoping to catch a stock on the upswing - and bring in mega-returns for themselves in the process. But what if you found a company that could rack up mega-returns even if its stock price stays flat?
That's the situation with the high-yield dividend stock Altria Group Inc. (NYSE: MO).
Many investors buy dividend stocks strictly for income - the price per share moves slowly over time, not offering much in the way of capital gains.
Last week Verizon (NYSE: VZ) upped its quarterly dividend 3.8%, or $0.02, to $0.55 per share.
Dividend-paying stocks like Verizon remain attractive to investors due to their highly competitive distributions as well as their potential for capital appreciation.
Best stocks to buy for the week ending Aug. 29, 2014:Last week for Money Morning Members, we highlighted seven stocks that bring readers the "best of the best" in four sectors currently overflowing with upside potential.
One pick hails from the 3D printing market that's expected to quadruple within the next four years. Another is in the fleet and fuel management sector - it's rapidly growing at a compound annual growth rate of 22.8%. We've got three energy stocks to buy from the most productive natural gas region in the U.S. And we highlighted two silver ETFs that play some promising numbers that were just reported from August.
Falling Treasury yields strengthen the case for buying stocks that pay dividends. Last Thursday the yield on the benchmark 10-year U.S. Treasury note hit 2.33% - a 15-month low - and ended the week at 2.34%.
Dividend-paying stocks not only offer attractive income options, but also provide the potential for capital appreciation.
Investors currently have a chance to pick up some of the best dividend stocks by looking at those in the Dow Jones Industrial Average.
The 10 dividend stocks listed below are among the best in the Dow. They all offer modest valuations and hearty yields, as well as the potential for capital appreciation based on forward earnings estimates.
Payout hikes for dividend-paying stocks were plentiful last week, and topping the list is Altria Group Inc. (NYSE: MO), which raised its regular quarterly dividend for the 48th time in the last 45 years.
The tobacco giant announced Thursday it's boosting its quarterly payout 8.3%, or $0.04, to $0.52 per share.
But Altria isn't the only company that raised its payout last week.
With few alternatives for yield-seeking investors, the appeal of stocks that pay dividends continues to grow.
In addition to yield, top dividend payers also offer benefits like the potential for rising distributions, capital appreciation prospects, and portfolio diversification.
Bank of America Corp.'s (NYSE: BAC) 400% quarterly dividend boost dominated dividend investing news last week.
BofA announced Wednesday it will raise its quarterly dividend for the first time in seven years to $0.05 a share, up from $0.01, with its Sept. 26 distribution.
Since 1926, dividends have contributed approximately one-third of total equity returns, with capital gains contributing the remaining two-thirds, reports S&P Dow Jones Indexes.
Last week, 65 companies sweetened their payouts, which follows 80 increases in the prior week.
Dividends constitute an ever-growing percentage of personal income, making up 5.64% of U.S. per capita personal income in 2012.
The good news for investors looking for more dividend income is that companies have been generous with their payouts in 2014, with 696 dividend boosts reported in Q2 2014 compared to 591 hikes posted in 2013's second quarter.
Dividends paid by S&P 500 Index companies will climb almost as much in the next five years as they did during the last four, according to Rod Smyth at RiverFront Investment Group LLC.
Smyth estimates payouts will grow 40% through 2019, barring any "significant earnings downturn."
With interest rates at an all-time low, high-yield dividend stocks have replaced bonds as the best option to provide a stream of income in a portfolio. What's more, they deliver the added perk of equity ownership for potential growth. But dividend yield can also be a trap - if a company's share price drops because it's not performing well, while the dividend remains the same, the percent yield will rise. That's why investing based on high-yield as the sole metric isn't always wise.
To get around that problem, investors can examine other metrics besides yield.
While commodities have been dominating our best stocks to buy lists lately, that's not the only asset hitting our radar...
Our new best stocks list includes a blue chip giant that's beating the broader market by roughly 50%, five small-cap stocks on the rise, and one generic drug-maker to buy now.