When Dividend Stocks Become Top Picks

Looking for yield? Who isn’t these days. Now just may be a fortuitous time to snap up some dividend paying stocks –Apple AAPL -1.56%, for example– to enjoy both the equity growth of a new product cycle, as well as a sweet dividend. The reason: Interest rates worldwide are at all- time lows and not exhibiting signs of rising, at least for the moment. Meanwhile, income oriented investments such as corporate or muni bonds are failing to excite due to their low yields. Indeed, today bond investors have to go out 5-10 years on the duration curve and confront single-A-credit ratings to achieve a 4-5% yield on corporate bonds.

With the US economy in mid-cycle growth, now might be a good time to add some large cap Technology stocks as income generating equities to your portfolio. Apple and Intel are currently top picks for dividend generating equities. Investors might also consider Taiwan Semiconductor (2.4%). For potential “value” stocks which have underperformed this year and pay a nice dividend, consider IBM (2.2%) and Qualcomm (2%).

Source: Forbes

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