Last Friday, after the Federal Reserve said the bigger banks could once again hike dividend payouts, investors scrambled to buy shares of blue chip financials. But when Foot Locker announced in February it was hiking its dividend, investors barely noticed. Maybe they should have: Investing pros say midsized companies that pay dividends may be a better bet than the giants.
About 244 mid-sized companies – defined as having a market value between $750 million and $3 billion – pay dividends, compared to 384 dividend-payers in the Standard & Poor's 500 index. But those that do possess many of the same appealing traits as their larger counterparts – strong cash flows, stable business models and less volatility than non-dividend-paying stocks. There's also added potential for faster growth, traditionally a reason investors like midcap stocks in general.
Source: Smart Money
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