Companies that pay consistent dividends put a ceiling on market declines. These companies generate consistent cash flows irrespective of market conditions. They are generally financially stable and mature companies, which helps their stock prices to increase steadily over a period of time . Moreover, dividends are also less taxed as compared to interest income. They help your portfolio to grow at a compounded rate and offer protection from earnings manipulation.
As the possibility of an immediate rate hike has been ruled out, dividend payers are even more in demand. Dividend paying stocks suffer when rates are rising as investors focus on safe bonds. Most importantly, such stocks when combined with a Zacks Rank #1 (Strong Buy), are expected to boost your returns. The favorable Zacks Rank should help these stocks to continue gaining this year as well: Darden Restaurants, Inc. (DRI), KLA-Tencor Corporation (KLAC), Hasbro Inc. (HAS), Campbell Soup Company (CPB) and American Tower Corporation (AMT).
Source: Zacks
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