Dividend Stocks For An Uncertain Macro-Environment

A recent report from Nomura Holdings, Inc. (TYO:8604) Equity Research has some interesting analysis on dividend stocks. The report, entitled “Stock Ideas In A World Of Hurt” begins by defending that title and offering some rays of hope to investors fearful due to the recent downturn in economic recovery expectations and equity prices. The first major section of the piece concentrates on companies that offer high dividend yields with little risk. These types of investments are highly sought after as an alternative to low yielding treasuries.

Stocks chosen under the section “quality dividend yields” all offer yields of greater than 4.5% with some edging toward 9%. The list concentrates on firms that have relatively low uncertainty associated with their business, and have the cash flow to pay dividends. For investors seeking a less risky investment which still generates income, dividend stocks are the way to go. Treasuries have ultra low interest rates, which have a negative yield after inflation. Foreign bonds are far too risky for most investors as Europe teeters on the brink of collapse. Distressed debt is an area for investors who are experts in the field, but should be avoided by the vast majority of both retail and institutional investors.

Source: Value Walk

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