There’s a strong tendency among income investors to seek out safety in dividend stocks. The theory, of course, is that if a company can afford to pay out dividends, or even raise the payout every year, it must be generating enough free cash flow to do so. It also means that said dividend stocks also have plenty of money to both run and grow the business.
There’s only one caveat to all this, which is that it is possible for these stocks to become significantly overvalued in a big bull market. Then, there’s a danger of capital loss. However, if you are a retirement investor and hold a diversified portfolio, a short-term dip shouldn’t hamper you too much: Cincinnati Financial (CINF), Piedmont Natural Gas Co. (PNY) and Sysco (SYY).
Source: InvestorPlace
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Posted by D4L | Sunday, October 12, 2014 | ArticleLinks | 0 comments »________________________________________________________________
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