The Fed’s bond buying and its policy of keeping the federal funds rate close to zero since late 2008 has boosted the money supply at a rate far exceeding that of gross domestic product growth. According to the central bank’s figures, M2 — the sum of money held by the public in transaction accounts, money market accounts and retail money market funds, as well as time deposits with balances of less than $100,000 — increased 2% in the first four months of this year. Investors seeking current income may well be better off building positions in quality companies paying high dividends on common shares.

To develop a list of buoyant dividend stocks that might be better choices for income and safety over the next few years, we pared the S&P 500 SPX +0.24% to the five stocks with the highest dividend yields that also meet two other quality standards. All have shown growth in annual sales per share over the past two years and produced sufficient free cash flow during 2013 to more than cover dividends, according to data provided by FactSet. Here’s the list: CenturyLink (CTL), AT&T (T), People's United Financial Inc. (PBCT) and Verizon Communications Inc. (VZ).

Source: Market Watch

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