Dividend-Stock Darlings

Investors are preparing their portfolios for a stock-market rally as the benchmark S&P 500 Index has jumped 13% since the end of August. By contrast, Pamela Rosenau, principal and chief investment officer of Rosenau/Paul Group, is sitting tight. Rosenau/Paul Group, which manages $700 million in assets, prefers steady dividend payers such as Chevron(CVX_) and Vodafone(VOD_), which help to smooth out stock-market fluctuations, she says. Rosenau also is managing director of HighTower Advisors.

Rosenau says she has an audited track record dating to 2000 that has handily beaten the stock market with a fraction of the volatility. Dividend stocks and master limited partnerships (MLPs) have buoyed her firm's portfolios in the past decade, when the S&P 500 has fallen in four calendar years. MLPs have high yields, liquidity and investment-grade debt. Large-cap companies can pay growing dividend yields that are outpacing some corporate bond yields, she says. Many large-cap stocks are trading at values that are well below where they were a decade ago. As a result, that asset class is attractive for the next 10 years, she says.

Source: TheStreet.com

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