Dividend Investing Does Work

Bill Cara over at billcara.com has posted an interesting bit of researchcompleted by Bear, Stearns, and Co. I found this statement especially interesting:

What’s more, we have found that during backdrops in which economic growth prospects wane, the dividend-paying universe stands out as a particularly effective investment theme. Year to date, the dividend-paying universe has delivered an average performance of 1.89% compared to the non-dividend-paying universe, which on average declined by 0.78% since the beginning of the year.

The article focuses on S & P’s group of companies they call the “Aristocrats” – companies that have increased their dividends consistently over the past 25 years. It goes in depth on how an investor can read economic data to enhance returns but I started to gloss over with that. I think the important thing to note is the reaffirmation that dividend investing does work, and looking for companies that consistently increase and pay dividends can be a very effective way to enhance returns. At least I hope so….

• Dividend Increases are Down and Dividend Cuts Are Up
• My Current Effective Dividend Yield: General Electric
• My Current Effective Dividend Yield: Bank of America
• Some More Dividend Payout Ratio Data
• Dividend Investing Strategy; Going Sector