Dividends4Life: Dividend stocks are buoyant

Dividend stocks are buoyant

Posted by D4L | Thursday, March 08, 2012 | | 0 comments »

You’ve heard about housing bubbles, commodity bubbles and the Internet bubble. Are we in the midst of a dividend bubble? After the big runup in dividend stocks over the past couple of years, a few people have started to throw around the “b” word. They argue that with bond yields at historic lows, income-starved investors have rushed recklessly into dividend stocks, pushing prices to dangerously high levels.

Granted, dividend yields used to be higher. Until the 1970s, S&P 500 companies paid out about 50 per cent of their profits as dividends, but the payout ratio has fallen to about 30 per cent. Given the more than $1-trillion (U.S.) of cash sitting on corporate balance sheets, however, the payout ratio will likely rise as companies return more cash to income-hungry shareholders. That’s one more reason that talk of a dividend bubble is just hot air.

Source: Globe and Mail

Related Articles:
- Are You Patient Enough To Be Wealthy? These 12 Dividend Stocks Will Help You Wait
- 10 Dividend Stocks For Healthy and Wealthy Retirement
- 15 Dividend Stocks With A 15% Yield In 15 Years
- Why Dividend Stocks Are Evil
- Don't Touch These 5 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