The mall scene may not be a hotbed of high-octane growth, but that didn't prevent operator Simon Property Group
Structured as a REIT -- or Real Estate Investment Trust -- Simon looks to grow its funds from operations in order to boost quarterly payouts to investors. Many mall companies like Mills
Over the last three years, Simon's quarterly payouts per share have grown from $0.505 to $0.65. That's something you won't find in a fixed-rate government or corporate bond. Sure, you have greater risks in buying into equities. There is no maturity date or lofty par value. Debt-holders will usually stand in line in front of shareowners to salvage what's left if the company goes under.
However, with the improving economy, buying into high-yielding stocks is a tempting strategy. As earnings grow, so grows the flexibility to hike dividends. While a traditional bond will have a fixed payout and usually fall in value as interest rates rise, growing companies can afford to put out competitive yields without giving up on capital appreciation.
Last year, we launched our Income Investor newsletter to unearth some promising income-producing securities. Singling out just the right dividend-paying stocks can give your portfolio stability in any interest rate environment.
As Simon illustrates, companies that grow their dividends are worth watching. Look around and you'll find others. Last week global insurance broker Willis Group
Clearly, utilities and financial stocks that offer dividends are in fashion, given their tax-advantaged spin. Even Microsoft
Do dividends matter to you? Even if they don't, do you see higher dividends as an indicator of an improving company or a failure to invest? What about convertible bonds? Are growth and income mutual funds bogus? All this and more -- in the Investing for Income discussion board. Only on Fool.com.