The Value of Owning Dividend-Paying Stocks

The first security I was ever aware of was a dividend-paying stock, the AT&T shares that my grandfather, a retired postman, owned when I was little. Those shares along with some other dividend-paying stocks formed the foundation of his nest egg. By reinvesting his dividends, he was able to amass sizable savings for someone who probably never earned more than $20,000 a year.

So when I heard recently that some advisers were using dividend-paying stocks to coax people who still hold their money in cash or low-yielding bonds back into the equity markets, my ears perked up. After all, dividend-paying stocks were largely ignored in the high-growth years for much of the past two decades. Companies that pay dividends, like Coca-Cola, McDonald’s, Caterpillar and Johnson & Johnson, are established corporations with none of the go-go appeal of a technology start-up.

Source: Gainesville Sun

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