Dividend Stocks: Longtime Dow Stocks With High Yields

The stock market may be one of the few places in the world (outside, perhaps, Match.com and eHarmony) where the word "mature" is considered pejorative. Clients may prefer a mature financial advisor -- a person who has seen the potential pitfalls and knows from experience how to navigate them -- but reject owning shares of a mature company because it no longer offers the growth potential of a startup. Yet investing in mature companies entails much less risk and can be rewarding to those who are patient.

Unfortunately, many investors still focus on stock appreciation rather than total return. Clients tend to ignore dividend payments, which trickle in over time. And nobody has ever wowed friends with tales of dividends collected over the years. But holding stocks with long dividend histories can often provide yields of 4% or more. Here's how: Assume one of your clients acquired a good dividend-paying stock a decade ago. Since share prices can vary considerably over the course of a year, let's also assume the cost was the average of the high and low prices for 2004. If that stock was Coca-Cola, your client's current yield on cost would be 5.3%. Investors in oil company Chevron fared even better, with a yield on average 2004 cost of 8.7%.

Source: Financial Planning

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