Dividends4Life: Unfounded concerns about dividend stocks

Unfounded concerns about dividend stocks

Posted by D4L | Friday, May 21, 2010 | | 0 comments »

Over the last five years, Kiplinger's reports, the average beta of a dividend-paying U.S. stock has been 0.98 percent while nonpaying stocks has been 1.5. I don't expect everyday stock researchers to check the beta factor before buying a stock, but this diminished volatility of dividend-paying stocks has been reported many times.

Worried about the effect of the Great Recession on your stocks? Dividend-paying stocks have shown more buoyancy than nonpaying stocks in hard economic times. For example, in the catastrophic year of 2007, stocks that paid dividend lost and average of 39 percent on a total return basis, while those of nonpaying stocks fell 45 percent. In 2002, the stock market's second worst year of the decade, non-payers fell 30.3 percent while dividend stocks surrendered only 10.9 percent including dividends, according to Kiplinger's.

Source: MercuryNews.com

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