Dividends4Life: Best Dividend-Paying Stocks to Buy Now

Best Dividend-Paying Stocks to Buy Now

Posted by D4L | Monday, October 01, 2012 | | 0 comments »

Some investors fail to realize that successful investing is a matter of continuous performance, not instantaneous performance. That's why we like dividend-paying stocks. Over time, dividends and reinvestment can account for 85%-90% of total stock market returns. In some cases, the dividends are so steady and increase so much that you actually make more in dividends than you paid to buy the stocks that produce them. And as inflation concerns grow following QE3, investors need to make sure they are protected. Money Morning's Global Investing Strategist Martin Hutchinson says dividend-paying stocks offer that protection.

"Do you know what the ultimate investment protection is? It's not gold, and it's certainly not Treasuries. It's dividend stocks," said Hutchinson. But before you go hunting for the best dividend-paying stocks, let's set some ground rules for evaluating which ones are most valuable. First, a good cutoff is a stock with a yield close to 3%, preferably higher, and a payout ratio less than 60%. Any higher payout ratio would indicate that the company cannot sustain the dividends, manage debt and grow at the same time. Second, look for companies that have price/earnings ratios less than 25 and a solid history of paying and increasing dividends.

Source: Money Morning

Related Articles:
- Holding Bonds Could Push Your Portfolio Into The High Risk Category
- Love People, Use Dividend Stocks
- The 2012 Dividend Achievers
- Why Dividends Matter
- 2011 Was A Great Year For 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