Reasons to Like Dividend Stocks

No doubt, there is the obvious that since the recent market peak in April, dividend yields have moved sharply higher, so much so that the S&P 500 now boasts a yield well above that of the 10-year Treasury bond. Most are also aware that, over time, dividend income has comprised a significant portion of long-term stock gains. However, there are at least five other reasons that have not received a lot of attention that further suggest the timing is right for an emphasis on yield.

1. Data going back more than eight decades show that dividend-paying stocks have delivered better long-term returns than non-dividend payers, with the higher yielders as a group performing best. 2. We’ve found that the returns of the Middle 40% and Highest 30% of the dividend-paying universe seem to have a profound performance advantage over stocks with no or low dividends. 3. The numbers we’ve crunched show that the seasonally weak six months of the year often reward those companies that offer a yield. 4. Corporate America appears to have plenty of ability to ratchet up dividends. 5. Dividends are back in vogue.

Source: Forbes

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