Well-established, dividend-paying companies have traditionally been referred to as widow-and-orphan stocks, because they provided their stockholders with a reliable dividend stream that could be counted on as a steady income. But while they may be given such a label, the fact of the matter is that many types of investors can probably improve their portfolios by including companies that make consistent dividend payments to shareholders.
For starters, the obvious benefit of regular incoming cash received from dividend payouts should not be overlooked. Periodic dividend receipts not only provide stability to a portfolio's annual rate of return, but also provide emotional support and peace of mind for the individual investor. As the market turbulence of the past several years has illustrated, stocks can be prone to drastic short-term changes in value. When prices do happen to drop, dividend-paying stocks can often keep a portfolio on track - and keep an investor from succumbing to panic.
Source: Investopedia
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