The Case For Dividend Stocks

Posted by D4L | Wednesday, February 20, 2013 | | 0 comments »

Low interest rates remain a positive for dividend stocks in 2013. As it becomes more difficult to generate meaningful returns from fixed-income investments, you are likely to see a transition from bonds to stocks in 2013. In fact, I believe this transition is already taking place and will accelerate if the stock market can maintain its upward pace that we have seen so far this year. Clarity on the tax situation is also a plus.

In addition, there's plenty of room for more dividend increases. By historical standards, the percentage of corporate profits that are being paid out to shareholders in the form of dividends is still on the low side. These are stocks that have raised dividends annually for at least 20 years: Aflac (AFL), the insurance firm; American States Water (AWR), a water utility in California; and Exxon Mobil (XOM), the oil giant. Others that merit attention from long-term investors are PepsiCo (PEP) and Procter & Gamble (PG).

Source: iStockAnalyst

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