Dividends are sometimes eliminated here or reduced there, but mostly they continue rolling in. The long history of stock returns shows that steady dividends matter more than dramatic price changes. In a 2002 study published in Financial Analysts Journal, money managers Robert Arnott and Peter Bernstein showed that $100 invested in U.S. shares in 1802 grew over the next two centuries to $37 million after inflation if dividends were reinvested, but just $2,099 if dividends were spent.
Share repurchases are valuable to investors, but they don't actually put cash in anyone's pockets, so those living on investment income should consider whether dividend yields alone on these stocks are high enough (unless they wish to periodically sell shares). Second, although companies usually state their dividend rates ahead of time, they spend on repurchases according to their cash flow. The recent recession showed that in a severe crunch, dividends prove much stickier than repurchases. From peak to trough over the past three years, dividend spending for S&P 500 companies declined 17%, mostly because of cuts at a handful of giant banks that weigh heavily in the index. Repurchase spending, however, plunged by more than 85%. So consider dividends the dependable portion of the yields below, and repurchases a welcome extra.
Source: SmartMoney
Related Articles:
Stocks With 'Net Payouts' of 8%
Posted by D4L | Monday, September 06, 2010 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Dividend Growth Stocks News
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
The most dependable dividend stocks typically have a long track record of sustaining payouts through different market cycles. Companies with...
-
Dividends can be a tremendously powerful part of your investing strategy. Not only can they give you a continuing source of cash to reinvest...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.