Dividends4Life: Reasons to Invest in Dividend-Paying Stocks

Reasons to Invest in Dividend-Paying Stocks

Posted by D4L | Friday, August 26, 2011 | | 0 comments »

Long-term investors often purchase stocks for their growth potential. Since capital appreciation is the goal, some stock-issuing companies reinvest their earnings in the company. The hope is that as they grow, they'll capture more market share, and the price of their stock will also increase. The reward for the investor is delayed, if it occurs at all. Other companies, such as Coca-Cola and General Electric, opt for instant gratification, paying part of their earnings—called dividends—to shareholders. Dividends are paid on a regular basis, often quarterly.

Why invest? There are several reasons to consider adding dividend-paying stocks to your portfolio:

  • Dividend payers may provide supplemental income during retirement, for example. They offer another choice for potential income in addition to bonds and cash investments.
  • Dividend-paying stocks have outperformed non-dividend paying stocks at times.
  • Dividend income may help cushion your portfolio against stock market volatility.The prices of dividend-paying stocks have historically fluctuated less than non-dividend paying stocks. Considering an addition of these income-producing stocks to your portfolio could potentially help smooth the impact of market swings.
  • A significant number of companies have increased dividends in recent years.
Source:  U.S. News and World Report

Related Articles:
- 13 Dividend Stocks Headed In The Right Direction
- 12 Industrial Strength Dividend Stocks
- 10 Financial Services Dividend Stocks To Boost Your Yield
- Building Yield: 15 Consumer Goods Dividend Stocks
- 10 Higher Yield Dividend Stocks

Click here to have future posts delivered to you for free!



Post a Comment

Note: Only a member of this blog may post a comment.


Popular Posts Last 30 Days