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'Ahead of the Tape' Today

Today’s ‘Ahead of the Tape’ from the Wall Street Journal by Kelly Evans cited some interesting data points on dividends – we have attached a portion:

… The total return for dividend stocks has topped nonpaying stocks every year since 2000 except for 2003 and 2009, according to S&P. And the gains that dividend-focused investors might have missed in those years are partly offset by their shallower losses during steep market selloffs. Given where we are in the current market cycle, with the strong rebound year of 2009 past, it would be highly unusual for dividend-payers to lag behind the market this year. Investors should also keep the power of compounding in mind: $10,000 invested in nondividend-paying stocks in 1979 would be worth about $250,000 as of 2010. The same amount put into dividend-paying stocks—and continually reinvested—would have returned $413,600, notes S&P’s Howard Silverblatt.  On top of this, companies are likely to ratchet up their payouts this year, continuing a trend from 2011. Corporate cash levels are near all-time highs, after all, and as BofA Merrill Lynch points out, the S&P 500’s current payout ratio is hovering at all-time lows…


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