The Best Dividend Stocks

Posted by D4L | Monday, February 11, 2013 | | 0 comments »

It turns out that you still have an overwhelmingly large number of stocks to choose among. In 2012, for example, more than 400 of the 500 stocks in the S&P 500 index SPX +0.57% paid dividends — or more than 80% of them. Telling me to confine myself to just the dividend-payers, therefore, doesn’t narrow my buy list down to a helpful number. The best way of going about constructing a portfolio of dividend-paying stocks, based on the Hulbert Financial Digest’s monitoring of more than 500 separate strategies, is to follow the methodology employed by Investment Quality Trends.

This service, inaugurated by Geraldine Weiss more than four decades ago and currently edited by Kelley Wright, doesn’t simply recommend the dividend stocks with the highest yield. The service instead focuses more narrowly on the bluest of the blue-chip dividend-paying stocks, and recommends one of them only when its yield is near the high end of its historical range. The service’s restriction to just the bluest of blue-chip companies is designed to avoid companies at which the dividend yield is only temporarily high — firms that are about to cut their dividends, in other words.

Source: Market Watch

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