Pointing to a recent study, we showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. Dividend stocks beat the overall market by an average of 1.36% per year in that period. These are risky times for fixed income investors. Ten-year treasuries yield less than 4% and the Federal Reserve is pursuing a highly inflationary monetary policy. Legendary investors Warren Buffett, George Soros, and Jim Rogers already voiced their concerns about the Fed’s policy. Warren Buffett thinks investing in long-term bonds is a bad idea.
For conservative investors who don’t want to speculate about commodities and want a stable quarterly income, we prepared a list of 35 dividend paying stocks that have below market average PE ratios and managed to increase their earnings per share over the past 5 years. A portfolio of these stocks should be able to make its dividend payments, preserve capital by increasing earnings per share over the long term, and protect investors against possible spikes in inflation. The data is sourced from Google Finance. We expect these stocks to perform better than 10-year treasuries over the next 10 years.
Source: Business Insider
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