Thinking small paid off big last year. Funds specializing in stocks of smaller companies gained an average of 23 percent compared with 13.6 percent for large-cap funds, according to Lipper Inc. But avoiding those big stocks could mean missing out on one of 2011's best opportunities: There's growing potential in dividends, and they're more likely to be paid by larger companies. That's because smaller companies generally reinvest profits in expanding their business. There are a couple reasons why dividend investing is likely to pay off this year:
An extension of the Bush-era tax cuts, approved by Congress in December, means Uncle Sam will continue treating dividend income favorably. And corporate America is sitting on piles of cash. During an economic recovery, corporations will be more inclined to raise their dividend payouts. "Traditional dividend investing is back in style as investors look for total return, stability, and income," said Howard Silverblatt, a Standard & Poor's analyst. "2010 was a very good turnaround year." Yet there's still a lot of ground to make up before dividend payouts reach their prerecession levels. Dividends are important because historically they make up more than 40 percent of the total return of the Standard & Poor's 500 index, with the rest coming from rising stock prices.
Source: Philly.com
Related Articles:
Things dividend investors need to know
Posted by D4L | Wednesday, January 19, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Dividend Growth Stocks News
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
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...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
The most dependable dividend stocks typically have a long track record of sustaining payouts through different market cycles. Companies with...
-
Dividends can be a tremendously powerful part of your investing strategy. Not only can they give you a continuing source of cash to reinvest...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
Dividend Aristocrats and Kings tend to snag most income investors’ eyes with their consistent dividend payouts, proven-and-tested business o...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
-
Double your money in a short time. Few investors would walk away from such an opportunity. Of course, there's no guarantee that any inve...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.