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Dividend-Income Info and Ideas



By Dian Vujovich

Income. It’s what we all want and need forever and ever. One way to satisfy that desire is by investing in dividend-paying stocks.

Although I’m not recommending a one of the companies mentioned later in this blog, I am recommending that you do some homework and then investigate any of the stocks listed that may appeal to you before investing.

First, the homework.

Jason Zweig wrote a great piece dated March 10, titled, Why You Should Get a Bigger Slice of Earnings.

As the title suggests, it’s about how dividend payouts have changed over the past few years in the companies that make up the S&P 500. As you might imagine, they’re down over 9 percent from 2009’s first quarter.

Zweig points out that next month (April) four big companies known for paying dividends—ExxonMobile, Johnson & Johnson, Procter & Gamble, and IBM— will announce whether they’re going to maintain, cut or increase their dividends. If you like these companies and one reason for the attraction is their dividend payout, it might be prudent to wait-and-see what each announce.

“Managements have two obligations to shareholders,” says Donald Kilbride, manager of Vanguard Dividend Growth fund in Zweig’s story, “to create value by improving return on capital and to distribute value by paying a dividend or buying back stock.”

Read the entire piece at http://tinyurl.com/ycppazw .

The second is a story from Investorplace.com, written on March 22nd by Richard Young, editor of the site’s Intelligence Report. As its title suggests, 7 Low-Risk, High Dividend Stocks, Young points out a handful-plus 2 dividend paying companies.

In alphabetical order they include:

• Deere & Company (DE). A brand we all know, the company had a dividend yield of 1.9% according to Young’ piece and has paid out dividends since 1937.

•Energy Transfer Partners (ETP). This energy stock had a 7.7 percent dividend yield and has consistently paid dividends since 1998.

•General Dynamics (GD). Hello defense industry. GD had a dividend yield of 2.3 percent and has paid dividends since 1979.

•Kinder Morgan Energy Partners (KMP). Another energy stock with a tempting dividend yield of 6.6 percent. KMP has consistently paid dividends to shareholders since 1992.

•Northrop Grumman (NOC). More defense. A quarterly dividend has been paid by NOC since 1951 and dividend yield is around 2.7 percent.

• Energy (WR). This utility company is the largest electricity provider in Kansas. Can you say “Dorothy?” Dividend yield on WR was 5.7 percent and the company has been providing dividend payouts since 1924.

• United Technologies (UTX). Ever since 1936 this aerospace industry company has been paying its shareholders dividends. Its current dividend yield is 2.4 percent.

You may read more about each company at http://tinyurl.com/ybeep7j .

Like everything else in the stock market, dividend payouts come with no guarantees from either the company that pays them or in dividend yields. So don’t simply jump into these income kicker-offers. Do your research to see if they are a fit for you.


To read more articles, please visit the column archive.




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