Dividends4Life: 4 Reasons To Focus On Dividend Stocks

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4 Reasons To Focus On Dividend Stocks

Posted by D4L | Thursday, December 01, 2011 | | 0 comments »

Credit Suisse is maintaining their fairly conservative equity stance, but advising investors to look into dividend paying stocks for stability in a volatile market. They offer four reasons rationalizing their approach: “This week, we reiterate one of our central and earlier calls, which is to invest in stocks with high dividends backed by operating cash flows. We believe that in this “zero interest rate environment,” equities with high dividend payouts are attractive alternative sources of yields for four main reasons:

First, because the spread between earnings or dividend yield and bond yields remains very high. Second, corporate balance sheets are generally solid, and at a 55-year high in terms of cash/total assets. Third, the outlook for earnings, and especially operating cash flows, is still fairly solid. Fourth, historical analysis indicates that dividends contribute a large portion of equities’ total returns

Source: Business Insider

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