Dividend Stocks Are Less Volatile

Volatility is good at times, but remember that it cuts both ways. Dividend-paying stocks tend to have less wild ups and downs on a daily basis, even in choppy markets. If you prefer to see smaller swings in your portfolio in a choppy market, consider owning a few income stocks with CAN SLIM traits.

Stocks that pay dividends tend to come from slower-growing, more defensive industries. These include food, beverage and tobacco companies. Electric utilities and natural gas providers are also known to return cash to shareholders through dividends. Companies in faster-growing industries tend to use cash from retained earnings to develop new products and services rather than pay cash to shareholders. But those in more mature and lower-growth reward shareholders by returning cash to them.

Source: Investor's business Daily

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