For one, Genter says that even after many large-cap U.S. dividend-paying stocks enjoyed a sharp rally in 2011 even as the market sputtered, many of these names were not bid up to levels where price-to-earnings ratios became too extended.
Doing so delivers a level of predictable income, rather than relying on what the market does, for investors that typically have about two-thirds of their portfolio in bonds and are looking for cash flow from their equity slice, Genter says.