Investors Flock to Dividend Stocks

Posted by D4L | Thursday, April 24, 2014 | | 0 comments »

Dividend stocks are back in favor amid concerns about the strength of earnings and the economy. Analysts estimate profits for companies in the S&P 500 dropped 1.2 percent in the first quarter, according to FactSet Research. And many analysts predict that economic growth shrank to under 2 percent in the first quarter from 2.6 percent in the fourth quarter. "We're giving more weight to dividends, just because we don't really see the engines of [economic] growth there," Scott Armiger, chief investment officer at Christiana Trust, told The Wall Street Journal.

"A sustainable dividend puts a floor under the price of the stock." Among the winners are Caterpillar, Merck and Entergy, the paper notes. All three have gained more than 11 percent this year, compared to a 0.2 percent decline for the S&P 500. Each of the stocks has a dividend yield of at least 2.4 percent. Many companies are increasing their dividends. Analysts anticipate S&P 500 companies will lift their payouts by 10 percent this year, according to FactSet, The Journal reports.

Source: Money News

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