Dividends4Life: Stocks Paying Over 6%

Stocks Paying Over 6%

Posted by D4L | Sunday, January 09, 2011 | | 0 comments »

How does a 6% yield on a U.S. stock sound? To careful market-watchers, it ought to sound suspiciously high. The S&P 500 index of large American firms is now 86% above its March 2009 low, and its average member's yield has shrunk to 1.6%. Fully 126 members see fit to pay nothing. Exclude them, and the average yield is still just 2.2%.

It wasn't always like that. For two centuries ended 2002, U.S. shares yielded an average of nearly 5%. However, since the middle of 1995, a string of stock bubbles, combined with a shift in management philosophy that favors now-and-then share repurchases over dependable dividends, has confined yields to less than 2.5%, save for during the three panicky quarters that ended June 2009.

Source: SmartMoney

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