Financial stocks have been in focus after earnings from heavyweights Goldman Sachs (GS), JP Morgan Chase (JPM), Bank of America (BAC) and others. Earnings at these top banks have apparently taken a hit as profits from their trading divisions have lagged. But investors shouldn't have to count on the investment arm of a big bank to make money

There are a number of high yield dividend stocks in the financial sector which offer plenty of payback no matter what the market does. These are financial stocks with big dividends that have managed to maintain high yields even as other financials have cut or eliminated their payouts in the wake of the financial crisis.

Source: BloggingStocks

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Summary only...

These are trying times for investors who rely on dividends from share portfolios for income. Yet income investing can be an attractive strategy. "In volatile markets the most guaranteed part of your total return is not capital gains - it is dividend income,'' says the director of research at Bell Potter Securities, Peter Quinton. ''So we are seeing [it] become a lot more important than is normally the case."

Classic dividend-investing theory teaches the importance of buying shares in companies that are growing and boosting their dividend yearly. Quinton advises investors to seek stocks paying above-average yields and aim for companies unlikely to report a profit decline over the next two years. He stresses the need to check that the company offers adequate dividend cover - a ratio that tells how much after-tax profit is being used to finance dividends: a ratio of two times means half the profit is being paid in dividends.

Source: stuff.co.nz

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Are you 56 to 62 years old? If so, what I’m about to say will probably scare you. According to the Employee Benefit Research Institute, nearly half (47.2%) of you in that age bracket will not have enough money in retirement to pay for basic expenditures and health care costs. That doesn’t mean vacations abroad or fancy cars; I’m talking groceries, house maintenance, and routine medical checkups.

Most investors love dividends; after all, you get paid to hold a stock, so it’s just like having the attributes of a bond, but there’s also the potential for capital appreciation. Every year the S&P 500 comes out with what it calls the “Dividend Aristocrats.” Essentially, it’s the cream of the crop for dividend investors, and the requirements are more than stringent: 1.) Minimum market cap of $3 billion. 2.) Minimum average trading volume of $5 million to ensure liquidity. 3.) Company must have increased dividends every year for at least 25 years. And the S&P holds a tight leash. If you’re on the list, it’s for good reason, and if you even slightly stray from the path, it’s sayonara to you!

Source: Motley Fool

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Investors spend their whole career skrimping, saving, and investing for retirement. Once you actually retire, though, it's a whole new ball game, and the question becomes how you can get the cash flow you need to survive without a paycheck.

One recent financial innovation is the managed payout mutual fund. These promise to pay you a steady, regular stream of income from your investments, regardless of the income or capital gains those investments produce. Although that kind of security sounds exactly like what crisis-frazzled investors want, does the strategy really work, or is it masking a bigger danger that smart retirees need to face sooner than later?

Source: Motley Fool

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AT&T Inc. (formerly SBC Communications) provides telephone and broadband service, and the company holds full ownership of AT&T Mobility (formerly Cingular Wireless). AT&T Corp. was acquired in late 2005 and BellSouth in late 2006.

In spite of a poor economy, T has performed well over the past year. The iPhone has provided gains in consumer wireless and should continue to do so near-term. Declines in landlines will continue to pressure T, but gains in consumer wireless and broadband should help to offset these. The company has a strong balance sheet and generates good free cash flow. I will continue to strategically increase my position in T when it is trading below my buy price of $26.52 and as my allocation allows

Source: Dividends Value

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If you’re like me, you’re getting more and more worried about where the economy and the stock market might go next. One consolation is investing in stocks that pay nice dividends. Why? I’ll give you five powerful reasons …

The best performers of all were companies GROWING their dividends. They turned $100 into $2,945 over the length of the study, while an investment in non-dividend payers turned into just $165. Still, the Ned Davis study also shows you have to be careful with dividends. An investment in companies that cut dividends ended up losing money.

Source: Uncommon Wisdom

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This big rally presents a big problem for retirees looking for income. Bonds have increased in value so much, and interest rates have fallen so low, we're simply not able to earn big, safe yields like we did last year. Fortunately, there's a solution... All you have to do is buy stocks that offer the safety of bonds... and the upside of stocks.

Bond investors demand regular income over a fixed period of time. They also demand their initial investment (called "principal") be returned in full. The problem now is that government bonds yield a measly 3%... and safe corporate bonds yield about 5.5%. While these yields are better than losing money, I believe investors can do better right now by owning stocks with rich dividend payouts of at least 5%... whose dividends are safe and growing. You can find plenty of these stocks in the drug and utility sectors.

Source: The Market Oracle

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Summary only...

''In volatile markets the most guaranteed part of your total return is not capital gains - it is dividend income,'' says the director of research at Bell Potter Securities, Peter Quinton. ''So we are seeing [it] become a lot more important than is normally the case.''The editor of Sound Money, Sound Investments, Greg Canavan, says in this environment ''income investing should become more popular because the market is not rewarding companies that are reinvesting for growth''.

While sustainability of dividends is important, it is not always easy to ascertain. ''You have to do a little homework into each company,'' says the research manager at F.W. Holst, David Spry. ''You have to look at the relevant industry and consider how cyclical is that industry. Because during good times, yes, a company might pay a very good dividend. But during bad times it might drastically cut it.''

Source: smh.com.au

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Dividend stocks are sometimes referred to as defensive stocks since many investors flee to them in an economic downturn. Their dividends, if sustainable, provide a minimum level of positive return. This cushions the downward pressure from the market. Better yet, great dividend companies not only sustain their dividends in a downturn – they actually raise them.

Selecting stocks with increasing dividends is critical for an income growth strategy. As always, due diligence should be performed before buying or selling any stock. For a list of stocks with a long string of consecutive cash dividend increases, see this list.

Source: Dividends Value

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Is a return to fat dividends becoming a distant dream for bank stock investors? Bank stocks historically appealed to investors because of their high dividend yields and stability as opposed to technology stocks, for example. Then the financial crisis hit and those banks that took government bailout assistance were forced to slash their dividends to minimal, if any, payouts. Most banks have yet to return to their historical payout ratios because they have either not repaid federal bailout funds, they are waiting for more clarity on the economic recovery and future capital standards, or regulators have yet to sign off on a dividend hike.

And while there is a growing sense that regulators will weigh in on capital standards by early next year, some observers are doubtful that the high dividend yields of yore will ever come back, especially as companies (both within and outside of the financial sector) re-think how they return capital to shareholders with many turning to buybacks instead.

Source: TheStreet.com

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In my dividend database, I track nearly 190 stocks in 19 different sectors. Generally, the characteristics of certain sectors tend to match those that dividend growth investors are looking for, thus their constituents are often make better dividend investments. In the case of the stocks I track, nearly half of them are in three sectors.

It is no surprise the above three sectors carry the highest allocation in my income portfolio. To keep my asset allocation balanced, I must overweight other sectors in my non-income portfolios. In the same way that too many deserts will expose you to unnecessary health risks, being over-allocated in any sector put your portfolio at risk.

Source: Dividends Value

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Well-established, dividend-paying companies have traditionally been referred to as widow-and-orphan stocks, because they provided their stockholders with a reliable dividend stream that could be counted on as a steady income. But while they may be given such a label, the fact of the matter is that many types of investors can probably improve their portfolios by including companies that make consistent dividend payments to shareholders.

While dividends aren't the whole story when considering whether to buy a stock, a relatively high current dividend yield and solid history of consistent dividend payouts certainly increases a stock's attractiveness. Provided the dividend amounts remain stable and are not reduced in the future, they can be a rare source of support for the individual investor in an otherwise turbulent market.

Source: Investopedia

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Wal-Mart Stores, Inc. operates retail stores in various formats worldwide. The company is member of the S&P 500, Dow Jones Industrials Average and the S&P Dividend Aristocrats indexes. Wal-Mart Stores has consistently increased dividends every year for 36 years. The company announced an 11% dividend raise in March 2010.

Currently Wal-Mart Stores is trading at 14.20 times earnings, yields 2.20% and has an adequately covered dividend payment. The company does spend a lot of its cash flow on stock buybacks, which could prove beneficial in the long run since it could provide above average dividend growth over time for the same effort.

Source: Dividend Growth Investor

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It sure isn’t easy playing it safe these days. Minuscule interest payments weren’t too big a deal during the depths of the financial crisis when all that really mattered was safety, but two years on that story line is wearing thin.The good news is that there are strategies for increasing your income stream to more than a pathetic trickle, from shifting cash into higher-yielding options to tilting your bond and even stock portfolio towards investments that can generate more income.

Blue-chip dividend stocks: Many dividend payers are now spinning off income above the 3 percent yield of the 10-year Treasury, but what should really get your attention is that many of them are high-quality stalwarts such as Johnson & Johnson, Merck, Walmart and ExxonMobil that currently trade at below-market p/e multiples. That makes dividend stocks a rare twofer right now: they are the sweet spot for stock investors that also provide bond-beating income payouts.

Source: MoneyWatch.com

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The power of dividends has helped millions of investors turn savings into true wealth. But thousands of stocks pay dividends. How do you know which dividend stock is right for you? The first thing you need to realize about dividend stocks is that companies pay dividends for a bunch of different reasons. That means that if you just look at the dividend yields of two different stocks and try to compare them, you might end up making big mistakes about which one is more promising.

Which type of dividend stock you want to own depends on your individual circumstances. If you don't need huge amounts of income right now, then more modest payers with opportunities for future growth are your best bet. To maximize income, though, some higher yielding stocks will serve you well, as long as you understand the prospective pitfalls. Don't let dividends confuse you. Once you understand why stocks pay dividends, you'll be able to separate the best from the rest and buy stocks that work for your needs.

Source: Motley Fool

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Sizable dividend boosts are an excellent sign for investors for two reasons. First, they suggest as much as any other measure that payments are safe. Companies can and do trim payments, but managers are generally loathe to do so, and few would announce increases if they had reason to believe cuts might become necessary. Second, dividends are more important to total returns than most investors believe.

According to a 2002 study published in Financial Analysts Journal, over two centuries ended 2001, U.S. stocks provided an average dividend yield of 4.9%. A $100 investment during that period grew to $2,099, net of inflation, assuming dividends were spent, and $37 million assuming dividends were reinvested.

Source: SmartMoney.com

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The U.S. recovery has stalled and economic indicators are pointing downwards, but investors selling out of the market now are doing so at a low. Investors that are adverse to risk and looking for relatively safe bets that pay a healthy dividend may want to check out these three defensive dividend stocks…

Colgate-Palmolive Company (CL) provides toothpaste and other consumer goods that are the staples of society and pays a healthy 2.55% dividend yield. While people may be cutting back on their spending, it is unlikely that they will cut back on the necessities provided by this company, making it a relatively safe and diversified play that pays a nice dividend. Last quarter, the consumer products company reported net sales that increased 9.5% due to favorable currency changes, steady selling prices, and growth in Latin America and Europe. However, net income fell from $0.97 per share to $0.69 per share year-over-year due to a one-time charge related to hyperinflationary accounting in Venezuela – excluding that it was up 25% to $1.21 per share.

Source: Sumfolio.com

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The power of dividend investing is pretty well-known these days. Higher-yielding stocks tend to offer higher returns over time than low- or no-yield stocks, according to research from Jeremy Siegel and others. In fact, the 20 best-performing survivor stocks from the original S&P 500 in 1957 are all dividend payers. What's more, reinvesting dividends acts as a "bear-market protector and return accelerator," according to Siegel. The extra shares purchased and accumulated at higher dividend yields during down periods act as a protector in falling markets, and these extra shares rising in value turn into a "return accelerator" when prices rise.

As the recent economic crisis illustrated all too well, however, you can't buy just any high-yielding stock. Dividends that are cut or suspended entirely can wreak havoc on a stock price, and thus your portfolio. Fortunately, there are some steps you can take to lessen your chances of buying one of these train wrecks. James Early, advisor of our Motley Fool Income Investor service, suggests looking at the payout ratio for starters. That's simply the percentage of a company's net income that is used to pay its dividend. Obviously, the higher the payout ratio, the tougher it is for a company to meet its dividend obligation. James looks for a payout ratio below 80% for safer companies, and a sub-60%- or even 50%-payout for companies you consider risky.

Source: Motley Fool

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Piedmont Natural Gas is a energy services company that distributes natural gas to 1,016,000 residential, commercial and industrial customers in portions of North Carolina, South Carolina and Tennessee.

PNY enjoys a simple business model within a stable market. I have been looking to increase my utility allocation, but have been uncomfortable with the underlying financials. At 3 Stars PNY is, by far, the highest ranked utility that I follow. At 52%, its debt to total capital is slightly above the 45% I prefer, but is not out of line with other utilities. Its free cash flow payout of 34% is well below the 60% maximum I look for and its 4 years if negative free cash flow in the last 10 years compares favorable with other utilities. Although the stocks dividend yield at 4.27% is lower than several others, its dividend growth rate of 3.74% is much higher. Overall, PNY is worthy of additional consideration when it is trading below my buy price of $26.17 and as my allocation allows.

Source: Dividends Value

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Guaranteed retirement income has become a hot topic In the wake of the 2008 market crash, with financial planners and government policymakers alike looking for ways to reduce retiree exposure to equities and boost sources of guaranteed income. Much of the buzz has focused on the humble single premium income annuity (SPIA), which offers regular monthly payments for life in return for an upfront lump payment to an insurance company. An SPIA can be a solid strategy for insuring against longevity risk--the risk of outlining your money.

But Charlie Farrell isn't buying into the income annuity hype. Farrell is a principal at Northstar Investment Advisors and author of Your Money Ratios: 8 Simple Tools for Financial Security (Avery, 2009). He offers this criticism of income annuities: "Giving up your life savings to an insurance company is a high-cost way to get a modest amount of additional income. It's also risky, because an insurer can go out of business."

Source: SecondAct Investing

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Ever wish that a great growth stock also paid a dividend? Well, if a company isn't forking over the dough, you'll just have to go out and get it yourself. All you have to do is write a covered call.

A covered call is a popular option strategy in which you sell (i.e., write) enough call options to "cover" the shares of a stock that you own. When you do this, you bring in a premium that is yours to keep regardless of whether the stock gets called away from you, and this money is your synthetic dividend.

Source: TheStreet.com

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A-rated DWS manager Thomas Schüssler thinks the culture of equity income investing in Europe is changing radically, and investors will put ever greater emphasis on dividends in the coming years. His dividend fund has just been launched into the UK where the culture of investing in equities for income is far more established than in his native Germany and the rest of mainland Europe.

'Traditionally there has not been a big demand for equity income funds in Europe, but I think this is about to change,’ he said. He thinks risk averse investors, who are only now starting to dip their toes back into equities, are responsible for the rising demand for equity income. ‘People have been coming back into the market in the most defensive way possible, through equity income. It is a stepping stone back into equity markets. We would expect to see this income-seeking component being a lot more important going forward.’

Source: Citywire

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Dividend growth investing in its classic form focuses on identifying solid companies with a long record of growing their dividends each year; and an expectation that they will continue to do so into the future. The focus is not solely on yield but a combination of yield and dividend growth. Often it is the lower yield, higher growth, security that will provide the best return over time.

Selecting stocks with increasing dividends is critical for an income growth strategy. As always, due diligence should be performed before buying or selling any stock

Source: Dividends Value

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Dividend stocks are shares of companies that pay dividends, which are the investor's cut of the profits that companies earn. Dividends are distributed to the owners of the company, the shareholders, with each holder of common stock entitled to a payment proportionate to his or her ownership in the enterprise.

When an investor receives a dividend, he or she receives actual cash that cannot be lost in the market or the economy. When companies retain money that could be used to pay a dividend, they may or may not do well with it. The investor may receive more money down the road because the company has done well with the money they have kept. On the other hand, the company may fritter the money away (it happens), or lose it in a prolonged downturn or sudden disaster. A dividend payment eliminates some of a stockholder's uncertainty. Actual cash is a sure thing.

Source: Helium

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My goal as a dividend growth investor is to build a steadily increasing income and not necessarily to outperform the market via capital gains. However, as numerous research projects have shown, a conservative dividend-based investment strategy has consistently outperformed the market over time. Now that we are passed mid-year, let’s take a look at some of the above average dividend performers for the first six months.

When a stock under performs the market (assuming there is not a fundamental reason for doing so), two important things are happening: 1.) it is becoming relatively cheaper and 2.) its dividend is becoming more attractive relative to the market. The opposite is occurring for the stocks listed in the first group.

Source: Dividends Value

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What happens if you own a dividend stock through the ex-dividend date but sell it before the payout? You still receive the dividend, since you are the shareholder on record as of the official date.

What happens if you have your broker automatically reinvest your dividends? At TradeKing, and most other brokers, you will still receive shares of stock even though you no longer own the shares that gave you the dividend. This is expected because at ex-dividend, that’s what you elected. Unfortunately, there’s no automatic check as to whether you own the original stake (is it technically correct to call it reinvestment if you liquidated the original?) and, as it turns out, there’s no way to change it with 100% certainty.

Source: Bargaineering.com

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Back in 2003 the Bush administration cut the top rates on dividends and capital gains to 15%. After seven years the preferential treatment of investment income is set to expire. If congress doesn’t extend the tax cuts, the top rates on dividend income could increase to as much as 39%. This leaves many investors wondering whether dividend stocks will be negatively affected by the tax hike.

Some dividend investors are concerned that the increase of tax rates on dividends will negatively affect payouts, which would negatively affect dividend stock
prices for the next few years. In general the future tax rates on investment income for 2011 and beyond are still not set in stone by Congress, which makes most assumptions on taxation of dividends or capital gains pure speculation. It is possible that the top rate on dividend income could only increase to 23.60%, as 20% was the highest tax on dividend income for which Obama campaigned in 2008, while the 3.60% comes as the extra tax for high income earners which generate investment income.

Source: Dividend Growth Investor

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Corporations have several clear ways to spend their cash: invest in the business, make acquisitions, buy back shares or pay shareholders a dividend. Lately, with bond yields so low and market volatility high, dividend-paying companies are getting plenty of attention. Dividend-centric portfolios have held their own as well. Equity-income mutual funds have a bias towards dividends; the category lost 2.3% on average for the year through July 8, about one percentage point better than S&P 500 index funds, according to fund-tracker Lipper Inc

Dividend income can cushion market shocks, and many well-known stocks now offer payouts of more than 3% -- better than a 10-year Treasury. Your focus should be on companies with a lengthy history of increasing dividends, reflecting a sound business, rather than on stocks with the highest absolute yield, which could spell trouble. "As we expect the stock market performance to continue to exhibit heightened volatility for the rest of 2010, we favor dividend growers and high dividend payers," Brian Belski, chief investment strategist at Oppenheimer Asset Management, wrote in a recent research report.

Source: MarketWatch

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There are many alternatives to treasury bonds for conservative investors who wish to generate income while controlling risk. For this article we will focus on the possibility of using dividend paying stocks as an alternative.

It must be stressed that dividends on common stock are not contractually protected obligations of the company. The Board of Directors is almost always free to pass common stock dividends at any time. As a result, investors looking for income must examine a company’s track record over many years, the competitive advantages of the business, and make an assessment regarding future prospects for the dividend. Simply buying the highest yielding stocks is a recipe for disaster.

Source: The Rational Walk

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Summary only...

Investors have gotten increasingly frustrated with companies that hoard their cash instead of putting it to better use -- like paying dividends to shareholders. But if you like a particular stock as an investment, but also need to draw income from it, there's still a way to turn you shares into a stream of income.

Dividend-paying stocks offer a great way to generate income from your investment portfolio. But if you want to own stocks that don't pay dividends, you can still reap some income from your investment. By using a strategy involving options, you can create regular income from your share holdings. The strategy is known as a covered call position. For every 100 shares of a certain stock you own, you can write one call option, which entitles whomever buys that option from you to purchase your shares at a certain price, within a particular timeframe. In exchange for that right, you get paid what's known as a premium in cold, hard cash. The premium is yours to keep, no matter what happens.

Source: Motley Fool

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General consensus is that small companies need to plow every available penny back into the business in order to fund their growth. However, just as in the large-cap world, dividends in the small space show financial discipline, often steady cash flows and low debt. These added dividends have many positive effects, including lower volatility and higher returns through dividend compounding. In addition, small stocks are often the leaders in bullish economic cycles. As fears of current economic malaise still persists, small-cap dividend stocks can pay while you wait out the storm.

Just as with large market capitalization dividend payers, investors testing the waters of the small-cap space should look for quality balance sheets, good free cash flow generation and high returns on capital. These are often hallmarks of value-styled stocks and many of the small-cap dividend leaders fall within that space. Investors may want to take a look at an ETF like the SPDR Dow Jones Small Cap Value (NYSE:DSV) for a starting point for individual stock ideas.

Source: Investopedia

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Harleysville Group Inc. is a regional holding company for property and casualty insurance companies that operates in 32 states, primarily in the eastern half of the U.S.

HGIC underwrites property and casualty insurance policies and offers commercial automobile, workers’ compensation, and multiperil insurance, as well as personal automobile and homeowner’s insurance. The company markets its policies through almost 2,000 insurance agencies, and maintains offices in about a dozen states. On October 27, 2009, HGIC agreed to assume Delta’s book of Delta Lloyds Flood Insurance Business effective November 1, 2009. The company has a strong balance sheet with very little debt. Although its free cash flow per share fell 46% in 2009, the company still has sufficient room to grow its dividend with a current free cash flow payout of only 35%. HGIC is trading below my buy price of $37.78 and thus earns serious consideration as a future buy, as my allocation allows. For additional information, including the stock’s dividend history, please refer to its data page.

Source: Dividends Value

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High-yield dividend stocks have fallen back into favor this summer as the market continues to remain choppy. Even though finding an investing strategy that works and generates big share price increases seems impossible, one thing that equity investors can rely on right now are the regular quarterly paydays from high yield dividend stocks.

And when it comes to high yield dividend stocks, there's no better place to look than the bluest of the blue-chip investments that make up the Dow Jones Industrial Average. These low-risk, stable companies are mainstays of many dividend investors' portfolios.

Source: TheStreet.com

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Something rare and wonderful happened last week: The average dividend yield on the 30 Dow Jones Industrial stocks surpassed the yield on the 10-year Treasury bond. As I write, the average Dow stock yields 3%, while the 10-year Treasury yields 2.93%. Since stocks provide the possibility of growth, investors are typically willing to pay a premium over bonds. When investors think future growth will be strong, the spread widens. When they're expecting a slowdown, it narrows.

Fear and greed control markets short-term, after all. When the spread hit negative 10.3% in 1932, the market was shouting from the rooftops that investors should flee stocks and hide in bonds. Stocks then nearly quadrupled over the next five years. When the spread hit 5.3% in 2000, the market was begging investors to go all in. You know what happened next.

Source: Motley Fool

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Whether you are an investor or a trader, opportunities to make money on the long side have been few and far between in 2010. For the most part, the name of the game has been to not lose money. Year-to-date, the SPDR S&P 500 ETF has fallen 7.35%. One way that investors can try to protect themselves from the furious market correction is to reduce risk significantly and focus on high-quality companies that pay dividends. In many cases, dividend yields have risen substantially as prices have come down.

These dividends provide a downside cushion for stock prices. Furthermore, many high dividend paying companies are engaged in defensive businesses that hold up better in a bad economy. Among the many stocks that are offering attractive yields right now are Altria Group (NYSE: MO), AT&T (NYSE: T), Chevron (NYSE: CVX), DuPont (NYSE: DD), Coca-Cola (NYSE: KO), and McDonald's (NYSE: MCD).

Source: Benzinga

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The goals of an income portfolio are much different than those of a capital appreciation portfolio. The good news is an income portfolio consisting of quality dividend growth stocks can not only succeed, but excel during a market downturn. Dividend investors are focused on building a stream of steadily rising income from solid companies. While many panic when their portfolios decline, income investors see a downturn as an incredible buying opportunity as they are look for sustainable growing dividends.

Selecting stocks with increasing dividends is critical for an income growth strategy. The above list contains stocks that recently raised or maintained their dividends, it is not a list of recommend buys. As always, due diligence should be performed before buying or selling any stock.

Source: Dividends Value

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Not everyone pays close attention to dividends, but for those that do the suspension of BP LC's (BP) dividend this summer may have raised questions about the stability of dividends. While BP's dividend elimination was due to a catastrophic event that would be nearly impossible to predict, it underscores the notion that no dividend is completely safe. Dividends (much like share repurchases) are at the discretion of management. While dividends are often believed to impose an extra level of discipline on management, with consistent and growing dividends sending positive signals to long-term investors about the stability and financial strength of a company, there is no guarantee that firms paying dividends today will be able to sustain or grow that payout over the longer term.

While there are myriad ways to screen for solid dividend payers, we think that looking at the holdings of our Ultimate Stock-Pickers, and separating the widely held firms that have wide economic moats and low to medium uncertainty from the rest of the pack, could offer up some interesting opportunities for investors. Companies with wide economic moats tend to reside in profitable industries and have long-term structural advantages that allow them to keep competitors at bay for longer periods of time, generate more predictable earnings and cash flows, and have returns on capital that exceed their cost of capital. A low uncertainty rating on a firm means that our analysts believe they can estimate future cash flows with a greater degree of confidence than companies with higher uncertainty ratings.

Source: Morningstar.com

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Deferred gratification is a principle where one or more people choose to postpone near-term benefits in order to enhance their chances of greater benefits in the future. In our microwave society marked by the ‘I want it now’ attitude, it is unusual to find someone willing to wait. However, deferred gratification is essential for anyone wanting to build wealth and is a key ingredient in a successful dividend investing strategy.

Even those investors that ultimately end up applying an income-based strategy must still face the question of deferred gratification. Do you want to buy a stock with a high yield and high current income or do you want to buy a stock with a modest, steadily growing dividend? If all stocks were created equal, then this would be a fairly simple question, but they are not.

Source: Dividends Value

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In the year following Bush's dividend tax cuts, the Dow Jones rose 16%. When the tax cuts expire in a few months, will the market drop? One method of evaluating stocks is that they are worth the present value of all the future cash flows. This can make dividend stocks particularly attractive to investors because they get paid rent or a dividend for holding a company. If conditions change and those future dividends are no longer expected, a stock can suddenly be worth a lot less. This is a large reason why we see stocks drop suddenly at earnings announcements or when companies revise outlooks.

Dividend taxation has long been a hot political issue as profits get taxed twice: once at the 35% company level and once at the personal level. This double taxation, which was one of the highest in the developed world, can actually discourage companies from paying dividends and instead reinvest the capital in expanding the business.

Source: BloggingStocks.com

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Dividends have historically contributed about 40% of common stocks annual average returns. Reinvested dividends however have contributed almost 97% of S&P 500 total returns since 1871. Add to that the fact that retirees are looking for a better way to generate income than the low rates on bank deposits. Thus it is no surprise that investors’ interest in dividend investing is increasing. Two differing paths are presented to aspiring dividend investors. One path is to do it on your own. Another path is to trust the experience of an investment professional and invest in dividend funds or dividend etfs. In this article I would compare and contrast the two methods and also outline some of the most widely held alternatives for both scenarios.

The main advantages of dividend funds are the instant diversification that investors achieve, since many of them hold a large basket of securities. It might also be cheaper to purchase one ETF than purchasing 30 or 40 individual securities. Another advantage of holding dividend etf’s is the time saved in research or portfolio rebalancing. This benefit of dividend ETF’s is especially important for busy investors.

Source: Dividend Growth Investor

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Tuesday's stock market selloff has scared flocks of investors into the "safety" of 10-year Treasury notes, driving yields below 3% -- a 14-month low. Of course, higher-priced Treasuries are more susceptible to interest rate risk (if interest rates double, principal value will be halved). Thus, a seemingly innocuous investment may actually be incredibly risky. If this trend continues, fixed-income investors (read: retired persons) will find themselves in a precarious position: How much capital can be sacrificed for current income?

Unfortunately, there are no risk-free investments, but a "dividend acid test" can be used to determine the relative safety of an income investment. Dividend Acid Test Formula
(10-Year Treasury Yield) less than (Stock Dividend Yield) less than (Liability-Adjusted Cash Flow Yield) By ensuring that the stock's dividend yield is less than the liability-adjusted cash flow yield (LACFY), investors can be reasonably confident that an operational incident or upcoming debt maturity won't derail their dividend check.

Source: TheStreet.com

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There are plenty of benefits of stocks that pay their dividends monthly, whether you are a retiree looking for income or an active investor looking for places to put your profits. According to the report that was just updated by WallStreetNewsNetwork.com, there are almost 300 different securities that pay monthly, most with very high yields. Technically, these stocks are real estate investment trusts, oil income trusts, closed end bond funds, and closed end income stock funds, which pay dividends every month. The advantages to having monthly dividends versus quarterly or annual dividend stocks are that your invested capital is returned faster, compounding happens quicker, and there is usually less volatility. As an added feature, many of these pay tax free income.

Some things to keep in mind when you are doing your due diligence and analysis on these investments. Be careful of the ones with high management fees, watch out for the ones with limited liquidity and which trade very few shares on a daily basis, and if you invest in the municipal bond closed end funds, make sure you know the consequences of the Alternative Minimum Tax. You also want to find the ones that trade at a discount to Net Asset Value, and avoid the ones using excessive leverage.

Source: Fav Stocks

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"If you have a rock, hide under it." That was the advice of one fund manager at a recent Morningstar conference, reports Eric Schurenberg at CBS MoneyWatch.com. I feel better now, don't you? The economy is on shaky ground, the markets are a mess and investors are wary of getting burned. Some experts at the conference were clinging to the one life raft they could find: Dividend stocks.

Dividend stocks are one asset the weary investor can bank on, experts say. "The big steady-going consumer companies and manufacturers that make up their universe lagged the rally since the March 2009 low, so that they are arguably undervalued," Schurenberg writes.

Source: MSN MoneyCentral

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With CDs and U.S. Treasury bonds paying almost no interest, where is an individual supposed to turn for income? Increasingly, analysts are challenging investing principles about risk and suggesting solid, well-known, dividend-paying U.S. company stocks as near-bond substitutes.

Beyond the government’s “well-exhibited capacity to conjure money,” Grant says, “we can’t think of a better reason not to own government securities.” Hence, his preference for what he calls “big, stable, dividend-paying adaptive corporations” that “can survive in most monetary and fiscal settings.”

Source: The News Tribune

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The recent market correction certainly doesn't make investors feel great when viewing their portfolio's, but it does offer an opportunity nonetheless. Contrarian investors should utilize times like this to differentiate between stocks that are dropping for fundamentally sound reasons -- and those stocks that are simply being dragged down because of general market concerns. Sure, there's plenty to worry about -- gigantic federal deficits, sovereign debt problems in Europe, an economic slowdown in China. But let's not forget that in the midst of all of this volatility lies the prospect to grab some great companies at dirt cheap prices.

In particular, I'm a huge fan of dividend stocks. Renowned Professor Jeremy Siegel has illustrated that from 1957 to 2003, when reinvesting dividends, the S&P's 100 highest-yielding stocks outperformed the market by an average of three percentage points. Over a long period of time, three percentage points can really add up. So if you can find dividend stocks trading cheaply, and can separate the good from the bad, you may found yourself a real winner.

Source: Motley Fool

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Summary only...

Nucor Corporation is engaged in the manufacture and sale of steel and steel products. As the largest minimill steelmaker in the U.S., Nucor has one of the most diverse product lines of any steelmaker in the Americas.

Like many industrials, NUE’s earnings and cash flow have declined over the last two years. However, the company is well managed with a solid share in its markets, a very low ratio of total debt to capital percentage and a very diverse product mix. The company’s pay-for-performance and low-cost operations have helped mitigate weak demand in the most recent downturn. The stock is currently trading well above my buy price of $26.72. NUE is a great company, but this is not a great time to buy.

Source: Dividends Value

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This year through mid-June, there were at least 135 dividend increases or initiations among the companies in the Standard & Poor's 500-stock index, up roughly 55% from the first six months of last year. And the gains are coming across a broad swath of industries. Chip maker Analog Devices Inc. in May said it would increase its quarterly payout 10%, to 22 cents a share. Dental-products provider Patterson Cos. in March announced it would initiate a quarterly payout of 10 cents a share. And on Thursday, Best Buy Co. announced it will raise its dividend by 7%, to 15 cents a share.

If the economy continues to gather strength, analysts say, many more companies will likely gain the confidence to boost dividends this year. So what has changed? Corporate balance sheets, which were squeezed during the recession, are once again brimming with cash. S&P 500 nonfinancial companies had a record $837 billion in cash at the end of the first quarter, up from $665 billion a year earlier, according to S&P.

Source: Wall Street Journal

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With all the market volatility of the base few weeks, investors can be forgiven for seeking safety in investments like high yield dividend stocks. Assets like Treasury bonds and gold have done well. From its April highs, the S&P 500 is down more than 12%. In comparison, the Gold Trust ETF (GLD) is up +11%. And the Direxion 30 Year Treasury Bull 3x (TMF), which returns three times the daily return of 30 Year Treasury Bonds, has gained +47%.

No worries. There are opportunities to be had in defensive utility stocks that offer attractive dividend yields at current levels. Here are a few examples of large, stable utilities offering dividends well in excess of the 3% you get on 10-year Treasury bonds: Pepco Holdings (POM) with a 6.8% yield, First Energy (FE) with a 6.1% yield, and Duke Energy (DUK) with a 6% yield. There was actually a Duke Energy dividend increase just this week.

Source: InvestorPlace.com

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Summary only...

Stocks that pay dividends have helped millions of investors become wealthy. But not all dividend stocks are the same. Before you simply pick a few for your portfolio, you need to get a grasp on one of the major differences among the thousands of stocks that pay dividends.

Investors choose dividend stocks for a variety of reasons. Some pay more attention to the company and its future prospects and happen to pick a stock that pays a dividend, with the dividend not really playing a major role in their investing decision. Others see dividend stocks as being categorically more conservative than their non-dividend-paying counterparts, and so they don't necessarily focus much on the particular attributes of the companies whose stocks they buy.

Source: Motley Fool

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