Dividend Stocks for 2013

Some are saying that Obama's "Taxmageddon" is going to be a game-over scenario for dividend stocks. However, we don't think so. Here's why. Institutional buyers of dividend stocks are taxed at their own rate so they did not benefit from the 2003 cut in dividend taxes anyway - which means they won't suffer from a new increase. And even among retail investors, many have their investments in 401(k)s or IRAs. These holders will continue to receive dividends that won't be immediately taxed.

The talk is that if we fall off the fiscal cliff, taxes on dividends will revert to the full income tax rate of each individual taxpayer. For the top retail taxpayers that are not investing using a tax-deferred account, that means the top rate on dividends will rise from 15% to 43.4% if dividends become fully taxable again. Enough said, now let's get to the stocks: They are Exelon (EXC), Safeway (SWY), and Energy Transfer Partners (ETP).

Source: The Stock Masters

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