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.
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.
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