On an after-tax basis, Canadian dividends are generally worth 1.31 to 1.45 times more than the earnings on interest income. Case in point: an Ontario investor in the highest tax bracket would have to purchase a bond yielding 5.36% in order to achieve the same after-tax income generated from a stock with a 4.0% dividend yield.
Dividend investing has a number of benefits beyond tax efficiency. They may not be glamorous but dividends play an important role in the total return of a portfolio. Over the past 40 years, 58% of the returns earned in the MSCI World Index were attributable solely to dividends. Companies paying dividends tend to be more defensive in nature and much less sensitive to interest rate fluctuations, historically generating superior total returns on a lower risk basis compared to the overall market.
Source: BC Local News
Related Articles:
Dividends pay better than interest
Posted by D4L | Monday, April 11, 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...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
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...
-
A select group of monthly dividend stocks pays dividends at a rate of 10% or higher. Those are the ones on this list. Investors should be aw...
-
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.