The Biggest, Baddest Dividend Stocks

Now more than ever, dividend stocks are a good play. Why's that? The average dividend yield of the Dow 30 stocks slipped past the 10-year Treasury bond yield. Historically, bonds have yielded 3.8% more than stocks since stocks also provide the prospect of capital appreciation. But with investors turning to Treasuries out of fear and the Fed working actively to keep rates low, 10-year bond rates are yielding a paltry 2.9%.

Don't be fooled into thinking dividend stocks are just for those nearing retirement, though. For fans of growth stocks, a study by Robert Arnott and Clifford Asness actually links higher dividend payouts to higher earnings growth. Further, Wharton professor Jeremy Siegel has studied the dividend situation and concludes: "Through the years, diversified portfolios of stocks that pay dividends have not only beaten those that don't, but have also handily outperformed the S&P 500."

Source: The Motley Fool

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