Dividends4Life: Dividends Can Keep Rising

Dividends Can Keep Rising

Posted by D4L | Tuesday, September 27, 2011 | | 0 comments »

Stocks that pay dividends can usually withstand a downturn because their payouts cushion the market's blow. But betting on them backfired in the credit crisis, when financial firms, which accounted for nearly a third of all S&P 500 payouts, slashed payments to stay afloat. A record $58 billion in dividends were cut in 2009. Now, thanks to big reserves and a greater mix of industries throwing off cash (financials account for just 12% of payouts today), dividend stocks can resume their role as shock absorbers.

Plus, in a slow-growth market, "we expect more of total return to come from dividends rather than capital appreciation," says Emanuele Bergagnini, Oppenheimer's director of U.S. equities. This year, the S&P 500 Dividend Aristocrats index is down 2.9%, vs. the 6.4% loss for the broad market. You can buy a mix of reliable dividend payers through SPDR Dividend ETF (SDY). It invests only in firms that have boosted payouts annually for at least 25 years.

Source: CNN Money

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