Dividend paying stocks may be the most under-reported and underrated investment opportunity of the year, according to many investment experts. As more and more S&P 500 companies pay dividends – and more dividend stocks increase their dividend rate – more and more investors are snapping up high dividend paying stocks to tuck into their investment and retirement portfolios. But are they a good deal for investors? Absolutely, say the proponents of buying dividend shares. Here’s why you should be looking at the best dividend stocks as a wealth-building strategy.
Dividends Per Share on the Increase
In 2013, , the total amount of money paid out as dividends by S&P 500 companies increased by 16% over the previous year.
Number of Companies Paying Dividend Shares on the Rise
In 2013, 405 of the S&P 500 companies – more than 80% of them – chose to pay out dividends. That’s more companies paying out dividends than in the past 13 years.
Dividend Rate Higher than 10-Year Treasury Bonds
According to BlackRock Investing, about 60% of the dividend paying stocks paid a higher return on investment than 10-Year U.S. Treasury bonds, typically considered one of the safest, most secure investments available.
High Dividend Stocks Increase Total Return
Based on history, dividend paying stocks make up a substantial portion of total ROI in your investment portfolio. Over the years since 1926, dividends from stock have accounted for more than 50% of the total market return for all investors.
High Dividend Paying Stocks Do Better in the Market
In addition to the income value of high dividend paying stocks, the underlying value of the best dividend stocks tends to increase faster than those that pay no dividends or those that pay low dividends. Not only will you reap the benefits of dividend shares, you’ll also see the actual value of the stock increase faster. On average, the best stocks for dividends turned in an average monthly return of .23% above the S&P.
That doesn’t mean that every dividend stock is a great investment. In fact, a high dividend rate can be deceptive. Unlike day trading, which is done purely on the strength of current numbers, investing in dividend stock requires a lot more research. Before you sink your nest egg into dividend shares, you should know the dividend history of the company as well as its current standings and its stability.
Not sure how to pick the best dividend stocks? Let us do the work for you. Get stock tips and dividend stock recommendations to help you pick the best stocks for dividends. We do the research so you can profit from owning high dividend paying stocks.