Dividends4Life: Want Income? Look Beyond The Old Reliable Dividend Stocks

What's up with dividend stocks? When rates on Treasuries rose last year, traditional high-yielding stocks -- utilities, telecom, and real estate -- tumbled, even as the overall market gained ground. One reason for the slide: As bond payouts have risen, high-yielding stocks that were being used as fixed-income substitutes are no longer as attractive. The other problem gets back to why the Fed floated the notion of beginning to pull back its stimulus policy in the first place: The economy is doing better.

As that happens, classic high-yielding but slow-growing stocks will underperform more economically sensitive ones in sectors like energy, tech, and industrials. Trouble is, you won't find utility-like yields among growth-oriented companies. 1. To do better today, venture overseas - The best income opportunities are beyond our shores. European stocks are 25% cheaper on average than U.S. shares, their yields are higher, and the leading economies are showing signs of emerging from their long malaise. and 2. Pair dividends with the promise of growth - Look for stocks with better-than-average yields and strong dividend growth, says Josh Peters, editor of Morningstar DividendInvestor.

Source: CNN Money

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