The Perfect Environment for Dividend Stocks

“Investors who once depended on their bank deposits to earn interest income now have to search elsewhere, as interest rates are at near-zero,” noted Esposito. “That search is leading them to dividend stocks. Investors are realizing that dividend stocks are paying out more interest income than the banks.” This means that increased demand for dividend stocks should help the shares of these dividend stocks rise, believes Esposito. Not only are investors earning interest income from these dividend stocks, but they are also earning capital gains, as investor sentiment is moving strongly in their favor.

The other positive to note is that corporations that become dividend stocks tend to have a solid market share within their industry, in Esposito’s opinion. In other words, they wouldn’t pay dividends on a regular basis unless they were confident of the revenue stream that their business is generating. According to Esposito, investors will also be happy to know that studies have been conducted on dividend stocks. It has been found that, during a downturn in the market, solid dividend stocks went down less than the rest of the market, making dividend stocks even more attractive.

Source: PRweb

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