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Handy links for dividend hunters

Bloomberg lists the dividends of S&P 500 stocks. Caterpillar’s yield is 3.76, but here’s something that may surprise you: Intel’s dividend (3.82) is even better. Heck, I thought tech stocks didn’t pay dividends.

(Dividends yield basics: yield travels in the opposite direction of price, so stocks with extremely low prices can have extraordinary dividends; the caveat being that extremely low price usually represents the market’s judgment on the company’s overall prospects. Gannett, the newspaper chain, is paying a 20 percent dividend, for instance, but newspaper stocks are off by an average of 83 percent in the last year).

Dividends, incidentally, are essential to the popular Dogs of the Dow strategy.

“Dogs of the Dow” or “High Yield 10”, is a popular investment strategy that defines a portfolio by equal dollar value investments into the 10 highest yielding Dow stocks at the end of a year. The theory behind the strategy is that dividends are more stable than stock prices and therefore, a high dividend yield reflects a stock that is near the bottom of its business cycle and has a beaten down share price that is poised for a rebound.

Good news: Cat is not a Dog.

Lastly: Some folks buy stocks just before their dividends are paid, then cash in shortly afterward. Note this supposedly works best in bull markets.

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Tom Mangan posted at 8:16 am January 2nd, 2009 |

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