Dividends4Life: Bargain Dividend Stocks

Bargain Dividend Stocks

Posted by D4L | Friday, August 06, 2010 | | 0 comments »

Hersh Cohen, the manager of Legg Mason ClearBridge Equity Income(SOPAX) who has been investing in dividend stocks for four decades, is finding some of the biggest bargains of his career. The stocks appear cheap because of their fat dividend yields, Cohen says. When share prices drop, dividend yields climb. And after languishing, many of Cohen's favorite stocks yield more than 3%. That's a relatively rich payout when 10-year Treasuries yield 3% and money markets offer negligible returns. "This is the first time since the 1950s when you can get higher yields on great companies than you can get on fixed-income investments," Cohen said.

Cohen argued that stock dividends can provide a reliable income stream. While some banks have cut their dividends recently, many companies have maintained long records for raising their payouts annually. During the past decade, S&P 500 dividends increased 5.9% annually.

Source: TheStreet.com

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