Michael Brush: Now’s the time to own dividend-paying stocks. These 5 offer up to a 9% yield.

by | Aug 14, 2023 | Stock Market

The “easy” gains of the early part of a bull market have been made, and stocks are more likely to move sideways. That means now is a good time to remember a frequently overlooked reality of investing: 40% of gains come from dividends over the long run.  Corporate insiders certainly agree. I track insider activity daily for my stock letter Brush Up on Stocks, and I’ve noticed solid insider buying in yield plays, relative to other groups.

Besides keeping the gains going in a sideways market, income-producing stocks offer two big advantages, points out John Buckingham of the Prudent Speculator stock letter, a value investor who favors dividend names. Dividend payers outperform non-dividend stocks over the long-run, meaning 20 years or more. And they do so with less volatility, he says.  With all of this in mind, I recently rounded up five promising yield stocks from Buckingham, insiders, and investment researcher Morningstar, paying close attention to cash flow, balance-sheet strength and yield.  Note that most of these names pay out more yield than certificates of deposit and offer the potential for capital appreciation as well, though there is risk to the downside, too, of course.  1. Verizon Communications (VZ); dividend yield 7.8%: Verizon

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