Dividends4Life: Stocks With Large Dividend Boosts

Stocks With Large Dividend Boosts

Posted by D4L | Saturday, July 24, 2010 | | 0 comments »

Sizable dividend boosts are an excellent sign for investors for two reasons. First, they suggest as much as any other measure that payments are safe. Companies can and do trim payments, but managers are generally loathe to do so, and few would announce increases if they had reason to believe cuts might become necessary. Second, dividends are more important to total returns than most investors believe.

According to a 2002 study published in Financial Analysts Journal, over two centuries ended 2001, U.S. stocks provided an average dividend yield of 4.9%. A $100 investment during that period grew to $2,099, net of inflation, assuming dividends were spent, and $37 million assuming dividends were reinvested.

Source: SmartMoney.com

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