Dividends4Life: Dividend Stocks To Help You Rise Above Low Interest Rates

Apple’s stock has a yield of 1.73%. That may seem low, but it’s almost as high as the yield on the 10-year U.S. Treasury note, which lacks the iPhone maker’s potential to generate outsized price gains. You may not think of Apple Inc. AAPL, +0.38% as a dividend stock, but, in fact, it pays a quarterly dividend of 47 cents a share, and the company has become remarkably friendly to shareholders, with stock repurchases causing its share count to decline by 6% during fiscal 2014. That helped push the company’s earnings per share up by 14%. (Revenue rose at half that rate.) So Apple will only become more attractive as a dividend-paying stock.

Why are U.S. rates still declining? After all, the Federal Reserve ended its massive “QE3” bond-buying program, which was meant to hold down long-term rates, a few months ago. Interest rates are declining because the dollar is rising, owing to the decline in prices for oil and other commodities, as well as uncertainty over the euro because of slowing economic growth, the crisis in Greece and the European Central Bank’s own massive bond-purchasing program, which ECB President Mario Drahi said on Thursday will total 60 billion euros ($69 billion) a month through the end of 2015. So the dollar’s “safe-haven” status could spell happiness for the broader U.S. equity market, but especially for dividend stocks, because many yield-hungry investors have nowhere else to go.

Source: Market Watch

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