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)
~
Popular Posts Last 30 Days
-
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 best dividend stocks have one thing in common: resiliency. They can continue increasing their dividends even in the harshest economic en...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Today we'll talk dividend deals. Big payers. Stocks yielding up to 10.3% and trading for as little as three-times free cash flow (FCF). ...
-
How high is too high when it comes to dividend stocks? Of course, every income investor wants as much yield as possible. However, they also ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.