The last few weeks of stock action have left an increasingly sour taste. Last week, stock prices dipped below lows reached during the so-called Flash Crash of early May. And there seems little relief from the pelting pessimism. But the retreat in prices has created some interesting investment possibilities. Shares of lots of good companies with decent cash positions are sporting historically high dividend yields. In a nervous market, a basket of dividend payers can be a shrewd way to position your portfolio to ride out the storm.
Like several other analysts and investors, HSBC has started noting the attractiveness of stocks paying high dividends. That's because dividend yields are rising, quickly. A dividend yield is calculated by taking the annual dividend payout and dividing it by the company's share price. So, if Mankato Fishing Lures (not a real company) trades at $100 a share and pays out $3 a year in dividends, it has a dividend yield of 3%. This yield is often compared to the yield on Treasury bonds or corporate bonds. Dividend yields are considered attractive when they rise above 10-year Treasury yields, which are currently at 3.3%. A good dividend also tends to pay more than the yield on a broad market measure. The Standard & Poor's 500-stock index is paying an average yield of 2.03%, and the Dow Jones Industrial Average is at a more handsome 2.7%.
Source: Wall Street Journal
Related Articles:
As The Market Pours Dividends Reign
Posted by D4L | Friday, June 18, 2010 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
The best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
When looking for dividend stocks to invest in, it is advisable to choose companies that have strong dividend histories and stable balance sh...
-
A good dividend stock has more than a high yield. Dividends need to be supported by cash flow, and cash flow depends on the long-term streng...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.