Fewer Firms Offering Dividend Payouts
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An article posted over at the WSJ presented this chart that highlights the declining payout ratio that companies have been historically paying to investors.
However, the article the goes on to elaborate that companies are missing the boat as the number of baby-boomers who will require income from their portfolio gets stronger year after year, the demand for stocks that pay dividends is increasing. Start paying out dividends and you could see the share price of your stock rising substantially.
“A lot of corporations are missing the seismic shift in retail demand for yield,” says Henry McVey, chief investment strategist at Morgan Stanley. A key to this trend: As tens of millions of baby boomers near retirement, the demand for high-yielding investments is rising.
I think this represents yet another reason why it is important to select stocks that continue to increase their dividends – as the payout ratios continue to drop, you as an investor can be assured that the income from the companies you own will continue to rise.
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2 Comments on this post
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Luke said:
That was a very quick and interesting angle…It makes a ton of cents….
June 28th, 2007 at 9:58 pm -
Nabloid.com said:
It’s a shame there aren’t plenty of higher yielding stocks around! In fact, there will be a whole lot less when Income Trusts are gone…
BTW, I was wondering if you wanted to add me to your blogroll, and I’ll add you to mine Dividend Guy?
July 16th, 2007 at 4:05 pm
