High Dividends Are Tempting, But Don't Overpay

The past year has seen a spectacular run for steady dividend-paying companies and other “defensive” stocks. How good? Well, just look at the movement of exchange-traded funds like the iShares Dow Jones Utilities ETF (NYSE:IDU) and iShares Dow Jones US Consumer Goods ETF (NYSE:IYK) — both up 17% in the past year, outpacing the S&P 500‘s 14% returns — or the iShares Dow Jones US Telecom ETF (NYSE:IYZ) and its 23% gains.

Of course, the downside of such an influx of investor interest is that many of Wall Street’s more ubiquitous dividend payers are sitting at relatively high valuations — in many cases, despite showing lagging revenue and earnings growth rates. The following 10 dividend-paying giants who might be getting a little ahead of themselves: Bristol-Myers Squibb Company (BMY), Pfizer Inc. (PFE), Kellogg Company (K), Colgate-Palmolive Co. (CL), Johnson & Johnson (JNJ), Merck & Co. Inc. (MRK), The Coca-Cola Company (KO), Southern Company (SO), The Clorox Company (CLX) and Procter & Gamble Co. (PG).

Source: InvestorPlace

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