Dividend Stocks Becoming Increasingly Popular

With the low interest rates provided by the banks, investors have been turning to dividend-paying stocks as a source of investment income. Dividend investing has become increasingly popular among investors, and the resulting demand is driving up stock prices. In 2011, dividend stocks crushed the 2.1% gain for the S&P 500 Index, gaining an average of 8.3%.

Howard Silverblatt, S&P's senior index analyst, recently stated that the Standard & Poor's 500 Index companies have never paid more dividends than now. In 2012, S&P 500 companies are on pace to pay out a record amount in dividends -- $277 million or about $29.02 per index share. "The pressure to introduce and increase dividends could get intense," said Joshua Peters, an equity analyst at Morningstar Inc. "Chief executives and corporate boards are going to start noticing that investors are rewarding dividend-paying stocks."

Source: Market Watch

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