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Dividend Investing

In the past, nearly all stocks paid dividends. For a variety of reasons, however, dividends have become less common. Many companies are putting earnings back into their businesses or use other methods, such as share buybacks, to return money to investors.

For those who want safety and security in their stock portfolio, dividend-paying stocks remain attractive. Over time, dividend payers have historically outperformed other investments, with quite a bit less volatility -- and that's a win-win for investors.

Income Investor
Our Motley Fool Income Investor newsletter service focuses on dividend-paying investments. We seek companies with certain characteristics, including:

  • A minimum 3% current or forward dividend yield.
  • A reliable dividend track record.
  • Reasonable payout ratios.
  • Sustainable earnings growth.
  • A competitive advantage that will hold up.
  • A proven management team.

Each month, co-advisors Andy Cross and James Early present two investment selections and analyze each company for catalysts and risk points alike. Once we select a company, we keep a watchful eye on it, in case our original reasons for buying change.

To see what The Motley Fool's Income Investor co-advisors, James Early and Andy Cross, are recommending to their readers now, take a free 30-day trial to Income Investor today.

You can also find out more about dividend investing from these articles:

Read/Post Comments (1) | Recommend This Article (21)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 16, 2009, at 12:45 PM, prginww wrote:

    What are my five stocks?

    Are they on some funky foreign market? And what can the catch be?

    Well, how about the New York Stock Exchange (NYSE) and there isn't a catch - well, except one.

    They look and trade like stocks - but they are actually closed end bond investment funds.

    You know them as the Pimco Strategic Global Income (NYSE: RCS), the Templeton Emerging Markets Income (NYSE: TEI), the AllianceBernstein Global High Income (NYSE: AWF), the Blackrock Income Opportunity (NYSE: BNA) and the Western Assets Emerging Markets (NYSE: EFL).

    These trade just like a stock - because they are stocks. And their assets generating the income to pay for those dividends are primarily government bonds from around the world.

    And get this - they trade at a big discount of 9 or more percent below the book value of the assets of these investment companies.

    No song and dance here - all you need to do is look at them for the long haul like I do. Stress-test them like I do - meaning - look at how they pay and perform year after year during all economic and market times. Sure, they bounce around the stock market - yet all along the way for the years and years that they keep operating - they keep paying you to own them.


    Money is like muck, not good except it be spread.


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