6 Safe Dividend Stocks

Posted by D4L | Thursday, November 29, 2012 | | 0 comments »

Value Line is an independent investment research and analysis company that has developed a safety ranking methodology which focuses on the long-term stability of company’s stock price and financial standing. The First Trust has created a specific dividend index fund, called First Trust Value Line Dividend Index Fund (FVD), which invests only in those companies that carry Value Line’s ratings of 1 and 2, representing the most stable and financially-sound dividend-paying companies. The fund, which consists of 168 companies, has a gross expense ratio of 0.78% and pays a distribution yield of 3.3%. Based on a three-year investment horizon, investors who sold their fund units on Oct. 31 would have made 11.9% in after-tax return.

All fund constituents are companies with a higher-than-average dividend yield, as compared to the indicated dividend yield of the S&P 500 Composite Stock Price Index. Investors in pursuit of stable dividend-paying companies with solid balance sheets and consistent earnings power should take a closer look at the fund’s top holdings. Here is a closer look at the fund’s several top picks by net asset value: Computer Sciences Corp (NYSE: CSC), Baxter International (NYSE: BAX), Eaton Corporation (NYSE: ETN), Dover Corporation (NYSE: DOV), Kellogg Company (NYSE: K) and Campbell Soup Company (CPB).

Source: Motley Fool

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