Dividend Stocks For Safety

Six weeks of dropping stock-market indices and dimming prospects for the global economy have investors looking for a safe harbor. That may very well be summed up in one word: dividends. More than in many years, especially since the Great Recession, dividend-yielding stocks are a crucial consideration for investors.

Dan Newhall, a principal in Vanguard's Portfolo Review Department, is among the overseers of the Vanguard Dividend Growth Fund(VDIGX), which has $5.7 billion in assets. He says there has been "an incredible amount of interest in anything that is income-oriented. ... It is not too far in the past where people didn't pay much attention to dividends," he says. "Frankly, companies and their management weren't very incentivized to pay dividends, especially with stock-option plans that were based entirely upon stock price appreciation and that is how they were getting compensated. They didn't really see the benefit. They'd rather plow everything back into growth projects that may or may not deliver the kinds of returns that they should deliver, or buy back stock."

Source: Business Insider

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