Stocks Offerring High Dividends

While human nature compels many investors to seek out wave after wave of glamorous growth stocks or newsworthy story stocks, the reality is that the most impressive long-term returns are often generated by relatively boring, yet profitable, companies. Among that cohort, many of the more well-established companies consistently pay out sizable dividends to their shareholders. Indeed, while stable companies that consistently pay dividends have been traditionally labeled "widow-and-orphan stocks," the fact of the matter is that they are not only suitable, but also desirable, for the equity portfolios of many different types of investors.

While any given dividend-paying stock could turn out to underperform the market average, especially if its dividends end up being reduced or removed entirely, an entire portfolio of dividend-paying stocks is likely to exhibit less volatility than the overall market. Drilling down beneath the surface, stocks that offer a solid dividend yield combined with positive earnings outlook, as the case appears to be the with Lorillard, are even more likely to end up producing healthy returns than the average dividend-paying stock.

Source: Investopedia

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