Dividend Stocks For Patient Investors

We've all been told that dividends matter. They provide extra income from holding a stock in addition to the gains (or losses) from the change in the stock price. For the S&P 500 as a whole, nearly half of its historical return is a result of dividends. While the last decade was considered a "lost decade" for the S&P 500, it would have been materially worse had no dividends been paid out by its member companies.

Interest rates are at historic lows; anyone with a checking or savings account knows that. Further, the yield on 10-year Treasuries is barely 3% and investors can't buy them fast enough. It's very probable that three to five years from now, those same investors who were buying 10-year notes and accepting a 3.0% yield will end up experiencing losses. And because everyone is rushing to buy bonds, stocks are getting abandoned irrationally. Dividends only pay off for the patient investor. If you can look beyond the next year and find good businesses likely to maintain or increase the dividend payout.

Source: Investopedia

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