Value Investing And Dividend-Paying Bandwagons

While momentum and growth stocks often have the more exciting stories, and the more expensive price tags, we think it important to remember the words of the father of value investing Benjamin Graham: “When shopping for stocks, choose them the way you would buy groceries, not the way you would buy perfume.” Having the potential for market-beating returns should be all the excitement that long-term-oriented investors need.

The importance of dividends was evident during the recent market selloff, as several of the names we detailed in our Value of Dividends report bucked the downturn. Take Caterpillar CAT -0.27%, for example. CAT has returned roughly 23% over the last 12 months, nicely better than the 22% total return of the S&P 500. With all of the speculation about the sustainability of the global recovery, it is also interesting to see how resilient this cyclical stock has been over the last week or so.

Source: Forbes

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