Investing in dividend stocks has been popular with low interest rates, but it's still a good move as rates rise.
As markets enter a seasonal period with a reputation as being sluggish for equities, dividend stocks can add some oomph to portfolios.
Providing income and stability, dividend-paying stocks help buffer market volatility, deliver yield, and offer potential for capital appreciation.
Some 68 companies hiked dividends last week, including three Dow Jones components and four notable financial firms.
Anyone investing in top dividend stocks has been rewarded in 2014...
Companies increased dividend payouts by a robust $17.8 billion in Q1 2014, compared to a $14.5 billion increase in Q1 of 2013, a 14.2% year-over-year increase, according to S&P Indices.
But top dividend stocks don't just have high yield - they also have a solid dividend paying history.
Dividend stocks 2014 update: With the U.S. Federal Reserve keeping interest rates at rock-bottom levels since 2008, yield-hungry investors have been flocking to dividend-paying stocks.
"Dividends continue to be one of the few income-generating alternatives to investors," said Howard Silverblatt, senior analyst with S&P Dow Jones Indices.
Dividend stocks update: One of the many advantages of dividend-paying stocks is that they provide investors with consistent income.
Wharton School professor and famous investment book author Jeremy Siegel has found that up until the early 1990s, roughly three-quarters of the real return from the stock market came from dividends, compared to just one quarter from capital gains.
Dividend stocks are off to a strong start in 2014. And with S&P 500 companies sitting on huge cash piles - $1.25 trillion for non-financial firms - companies can afford to sweeten payouts.
This follows 2013's generous year in which cumulative dividend hikes amounted to a hefty $56.7 billion.
This is great news for income-starved investors who continue to gravitate toward dividend-paying stocks, as money market funds yield a paltry 0.01%.
Dividend stocks news: The U.S. stock market had its strongest performance last year since 1997, up just shy of 30% in 2013, as measured by the broad-based Standard & Poor's 500 Index.
The Dow Jones Industrial Average, up 26.5% and hitting 52 all-time highs, logged its best annual gain since 1995. And the Nasdaq soared some 38% and marked its best year since 2009.
More and more companies today seek to attract investors by offering dividend payouts - and yield-hungry investors love their dividend stocks.
The Wall Street Journal noted on Nov. 18 that 51 of the top 100 Nasdaq stocks currently pay dividends. That's in stark contrast to December 1999, when a mere nine of the top 100 Nasdaq companies paid dividends.
From the Editor: You're going to hear plenty of analysts telling you where to put your money today. But tomorrow you're going to hear them telling you to put it somewhere else. That's because mainstream advice is reactive, driven by headlines. Results, on the other hand, are driven by time-tested strategy... like the one you'll find in this excerpt from Keith's book, "The Money Map Method."
Many people are surprised to learn that dividend income and reinvestment can account for nearly 90% of total stock market returns over time.
That's right. Not a quarter... Not half... But 90%.
That's why placing a high priority on dividends in the [Money Map's proprietary] 50-40-10 Strategy is paramount to its success.
Unfortunately, this goes counter to the inclinations of far too many investors. They spend the bulk of their time chasing "the next hot stock" or searching for the next "sure thing."
No doubt we all love the elation that goes with being up 25%, 50%, 100%, or more.
Don't get me wrong, though. I'll take gains like that too - and we get more than our fair share in The Money Map Report model portfolio. Yet when it comes to consistently growing and protecting our money, I'd rather focus on getting the cold, hard cash that dividends kick off. That's because I know those are a much bigger component of overall investment returns over time.
I point this out because what most people fail to realize is that successful investing is a matter of continuous performance - NOT instantaneous performance.
Every dividend investor loves the arrival of those quarterly distribution checks. But thanks to "Taxmageddon 2013" those checks could get a whole lot smaller.
As things currently stand - with higher tax brackets, no extension of the Bush-era tax cuts and the addition of new levies on higher-income payers to fund Obamacare - the tax bite on some dividend payments could rise from as little as 15% to as high as 43.4%.
Many investment advisers like to recommend stocks with large buyback programs. A buyback, they argue, is like some sort of magical panacea.
It allows companies to invest in themselves which pushes the share price higher.
On the face of it, the premise seems logical enough. But the reality is that it's not quite that simple.
With the economy beginning to stall, Ben Bernanke's war on the nation's savers rolls on.
From his promise to keep the Fed funds rate near zero through late 2014 to his efforts to push ten-year note yields even lower, the Fed Chairman is a saver's worst nightmare.
Over the past few years there have been unprecedented swings in the major indexes, scaring some investors out of the markets altogether.
What people don't realize is that successful investing is a matter of continuous performance, not instantaneous performance.
After Tuesday's closing bell Dell (Nasdaq: DELL) gave shareholders good news: it will begin paying a dividend later this year.