Dividends4Life: Dow Dividend Stocks to Boost Yield & Safety

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Dow Dividend Stocks to Boost Yield & Safety

Posted by D4L | Sunday, November 20, 2011 | | 0 comments »

With the ebb and flow of news coming out of Europe set to dominate another week of investor decision making, defensive or risk-off strategies are again moving to the front of the market. There's no better example of this than the plunging 10-year Treasury note yield which has fallen from 2.4% to 2.1% in the past 2 weeks. As a result, alternative ideas, such as one that would boost your yield by 70% (from 2.1% to 3.6%) without going bonkers on the risk-curve, appear to be gaining traction. In this case, it's a basket of 5 blue chip multi-nationals, all of which are Dow Jones Industrial Average components.

"You're getting paid double with the dividend yields of these companies than with their own (3 to 5 year) bonds," says Scott Schermerhorn, CEO & CIO of Granite Investment Advisors or Concord, NH. "I think it's a great way to grow you income when there's not many other income options out there." Of his five yield-horses, 2 of 3 pharmaceutical companies in the Dow make the grade, including AAA/Aaa rated Johnson & Johnson (JNJ) as well as rival Merck (MRK), whose 4.7% yield is the third highest in the Dow behind telecom titans AT&T (T) and Verizon (VZ). "I believe five years from now, J&J's stocks will be higher, and I believe they'll continue to increase the dividend over the next five years," Schermerhorn says.

Source: Yahoo Finance

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