Stocks that pay real dividends

Investors should consider dividends when building their portfolios. Although dividends are often viewed as boring, they can be quite glamorous given the potential they offer. And, as yield dwindles in the bond markets, it's increasingly important to consider alternatives for income portfolios. History shows that dividends are a major contributor to total returns. According to a recent Guardian Capital LP report, 58% of the total returns earned in the MSCI World Index during the past 40 years came from dividends, making income as important as capital gains.

Over the past 30 years, capital appreciation was responsible for only about a third of the returns, with dividend yield making up the balance. Dividends are generally a more reliable contributor to total returns than price appreciation because companies must be on a solid footing to sustain dividend growth. Those with a track record of increasing dividends typically have a sustainable advantage and are doing well in their respective industries.

Source: The Gazette

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