Dividends4Life: Are Dividend Stocks The Best Investment?

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Are Dividend Stocks The Best Investment?

Posted by D4L | Friday, January 20, 2012 | | 0 comments »

As stock market uncertainty heightens, it makes perfect sense for the risk-averse to shift to safer assets. But, for those investors, who want to buy distressed shares at cheaper prices and also make some returns from them, companies that dole out high dividends are good options. Several retail brokers are publishing their lists of the best dividend-yielding shares, but investors need to look at the dividend yield of the stock and the company's track record for dividend payments before taking the plunge.

What does a dividend yield measure? It compares the relative attractiveness of shares of various dividend-paying companies. How is it calculated? It is calculated by dividing the annual dividend by the current share price. How to distinguish a good dividend yield paying company? Seasoned investors consider a dividend yield of over 5% attractive and a track record of at least five consecutive years of such payments.

Source: Economic Times

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