Dividends4Life: The Allure of Dividends

The Allure of Dividends

Posted by D4L | Wednesday, August 05, 2015 | | 0 comments »

I love the safety of cash — especially in crazy times like these, when it’s hard to determine whether the circus in Greece or the crash in China will have any noticeable impact on us here in the U.S. But I love dividends even more. That’s why I’m drawing down my cash reserves, ever so gently, to pick up a few bargain-priced stocks. If a company will pay me double, triple, even four or five times what I can earn on the highest-yielding bank money market account, I’ll take the dividend — even if it means swallowing a certain amount of stock market volatility along the way.

So yes, I’m buying, and I encourage you to do the same, emphasizing stocks that pump out a generous income here and now. That description includes our utilities, such as electricity supplier Southern Company (SO, 5% yield) in the main model portfolio, as well as one of our holdings in the Incredible Dividend Machine portfolio, which you can gain access to by subscribing here. I expect both Southern and our IDM holding to boost their dividends at least as quickly as interest rates rise over the coming decade. Meanwhile, actions are speaking louder than words in the pipeline partnership arena. Think MLPs are in a cash crunch? Enterprise Products Partners’ (EPD, 4.9% yield) new payout is 5.6% better than it was in the year-ago period, and Plains All-American Pipeline’s (PAA, 6.35% yield) distribution is better by a lush 7.8%. If these infrastructure operators were experiencing a cash-flow crunch, their boards of directors wouldn’t be voting such liberal payout hikes.

Source: InvestorPlace

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