However, what will potential tax law changes do to the dividend paying stock sector?
If you also have income producing investments such as rental property or dividend paying stock or bonds, your position is even stronger.
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One of my grandfathers worked for thirty years for a manufacturer of household appliances, retiring with a gold watch, the house he bought in the 1950s, and some dividend-paying stock in a utility company.
Another reason to like dividend stocks is they tend to be less volatile over time because yield provides support: a stock yielding 5% is less likely to get cut in half and yield 10% than a non-dividend paying growth stock or a low-yielding stock.
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When a company buys back stock instead of paying a dividend, the stock value appreciates by the like amount of the dividend and long-term shareholders get a 50% savings on their tax bill (assuming a 40% ordinary income tax rate versus a 20% long term capital gains rate).
The ranking looks at dividend-paying history, stock performance and fundamentals.
There was an exodus of income investors who were forced out of the bond market by inflated bond prices and low yields, and into the stock market mostly dividend paying stocks.
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In addition to further potential capital gains at its current price the stock is paying a nice dividend yield of 5.4%.
They already started paying a dividend, and keep buying back stock.
Other defensive measures, such as converting non-voting shares into common stock, and paying a special dividend, also look reassuringly shareholder-friendly.
But even if macro concerns of excessive investor pessimism keep a lid on stock prices in the months ahead, dividend paying stocks offer respectable cash payouts that are close to as safe as bond yields.
Stock investors have been gravitating toward higher-quality, dividend-paying names.
Dividend-paying stocks can particularly be attractive for retirees since dividends are generally less volatile than stock prices and tend to increase faster than inflation.
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