Dividend Stock News

Dividend stocks rarely perform above the market, yet consistently perform at market levels. REITs are an exception:

If you think dividend-paying stocks are boring, consider this: Over the five years that ended Dec. 31, shareholders of real estate investment trusts enjoyed a 23 percent average annual return. By contrast, the market, as measured by the S&P 500 index, averaged a 1 percent annual loss during the same period.

Why choose REITs? Tax-loopholes –> high dividends:

REITs don’t pay income taxes as long as they pay at least 90 percent of their taxable income to shareholders. Because REITs don’t pay taxes, their dividends are taxed as regular income instead of at the lower 15 percent capital gains rate. So, it’s best to keep your REITs in a tax-sheltered account.

• Northwest Bancorp, Inc. Announces Fourth Quarter Earnings and Declares Increased Dividend
• Harrah’s increases quarterly dividend by 10 pct
• Crown Castle International Declares Quarterly Preferred Stock Dividend Rate
• HP Board Declares Regular Dividend
• Mobilcom Expected To Fall On Dividend News
• MAXIMUS Declares Quarterly Cash Dividend
• D.R. Horton Raises Dividend
• NB Capital Corporation Announces Dividend
• PSB Group, Inc. Announces Quarterly Dividend Payment

The Motley Fool reports that Microsoft’s dividend makes the stock quite attractive:

The company has a proven history of insinuating itself into the information-technology culture. It has made its way to the Dow Jones Industrial Average. It has just begun its life as a dividend player — it doubled its annual dividend to $0.32 — and I’d be willing to wager that many more lush dividend increases are waiting down the line. (The company increased free cash flow this fiscal year 16.8% to $15.79 billion.)

• Realty Income Declares 421st Consecutive Monthly Dividend
• Great West Gold, Inc. Declares a Stock Dividend
• Merrill Lynch doubles Bezeq dividend forecast
• Walgreen Co: Dividend grows 24% as profits blossom
• MidSouth Declares a 10% Stock Dividend
• An exception: Sears Holding: Shareholders won’t be paid a dividend

A slow announcement day:

• Empyrean Holdings, Inc. Declares Stock Dividend
• PolyMedica Declares Regular Quarterly Dividend
• MobilCom Bonus Dividend Likely
• Scudder Strategic Income Trust (KST) Declares a Monthly Distribution
• Mobilcom CEO leaves over dividend dispute

REITs are great sources of dividend income. In the last few years, the housing boom has made such investments even more attractive. Some question whether a bubble is ready to burst in REIT stocks:

But a growing number of analysts are warning that REIT shares are overvalued. The average dividend yield on REIT stocks is just under 5 percent, more than double the yield of stocks in the Standard & Poor’s 500 index. But REITs are more vulnerable to any abrupt uptick in interest rates, analysts agree. As a result, investors should temper their expectations. The last time REIT fund inflows reached current levels was in early 1997, followed by two years of poor performance.

Read the rest.

For dividend press releases!

• Laidlaw International Will Pay Quarterly Dividend
• Will Merck dividend rise?
• H&Q Life Sciences Investors Pays Stock Dividend
• XM Satellite Radio Holdings Announces Quarterly Dividend
• ConAgra Foods Declares Quarterly Common Stock Dividend

This great Motley Fool piece on the power of investing in dividend stocks lists some sound choices:

• Lucent Technology (NYSE: LU)
• Coca-Cola (NYSE: KO)
• PepsiCo (NYSE: PEP)
• Hershey Foods (NYSE: HSY)
• Tootsie Roll Industries (NYSE: TR)
• Wrigley (NYSE: WWY)
• Diageo (NYSE: DEO)

More dividend commentary.

Question:

“Are there mutual funds which specialize only in dividend-paying stocks, and what are the pros and cons of this type of investment?”

Answer:

Yes, there are plenty of funds that focus on dividend-paying stocks, and the iShares Dow Jones Select Dividend Index (ticker DVY) is an exchange-traded fund that has been popular for awhile now with dividend investors.

You can find plenty of large-cap value and blend funds loaded with dividend paying stocks. Morningstar Inc. analysts give good ratings to the Vanguard Equity-Income fund (ticker VEIPX), Clipper Fund (CFIMX), Oakmark (OAKMX), Sound Shore (SSHFX) and T. Rowe Price Equity-Income (PRFDX).

More questions and answers about dividend stocks and funds.

Experts agree: dividends are good for you::

“Dividends matter,” declares a commentary by Wanger, who, at age 71, remains an adviser and trustee, in the funds’ latest quarterly report. “An investor, given a choice between capital gain potential (uncertain because the stock market does odd things sometimes) and dividends (much more stable) should prefer the dividends because they are a lot less risky.”

Read more.