High payout stocks don't lag wth rising interest rates

The powerful tailwind of lower interest rates is history. Corporate profits as a percentage of the gross domestic product (GDP) are at historic peak levels and most likely have little headroom on the upside. All this means that you are going to find dividends even more important in upcoming years.Corporate staff reductions have been made, and the tremendous value of low interest payments for bond-issuing corporations is over. And companies with weak pricing power are going to find sledding tough as inflation cycles up.

The investment environment remains extremely challenging, necessitating a more defensive stance than you might normally adopt. Many of the names on our list of blue-chip dividend stocks look ready to increase their payouts this year. When you are happy with the dividend a company pays, and enthusiastic about an increase in your dividend in the year ahead, you have done as good a job as you can do in ensuring consistently positive long-term total returns. The value of high-yielding stocks is less sensitive to interest-rate changes than the value of non-dividend-paying stocks.

Source: Investor Place

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