The Weakest Link in Today’s Market

Expending more than you take in works for a diet, but it doesn’t for the stock market. That’s the upshot of a recent Wall Street Journal article by Steven Russolillo, who writes that today’s ultra-low interest rate market is allowing share prices to “stay higher for longer than under more normal circumstances.” What could “end […]

Shopping for Dividend Yield Without the Traps

While high dividend yields (yield defined as dividend divided by stock price) are appealing, they become less so if they’re a function of a low stock price that reflects underlying financial weakness. In a recent Forbes article, Validea CEO John Reese says to look for those stocks that show higher-than-average yields along with a history […]

Avoiding the Value Trap when Shopping for Payout

Shopping for yield when interest rates are at rock bottom levels can attract an investor to low-priced stocks that may not be the best prospects. A recent Barron’s article cautioned investors that high-yielding stocks could be “value traps”. Analysts at Evercore’s ISI Team (a research arm of Evercore Partners, an investment bank and money manager) […]

The Importance of Dividends for the Long Term Investor

Dividend producing stocks are attractive and offer investors compelling values (subscription required) according to this AAII Journal article by John Buckingham, director of research and chief portfolio manager of AFAM Capital and editor of the Prudent Speculator newsletter. Keep in mind, the article was written in mid-2015, but many of the statistics in the article […]

Peter Lynch And High-Dividend Stocks

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the Peter Lynch-inspired strategy, which has averaged annual returns of 11.2% since its July 2003 inception vs. 6.4% for the S&P 500. Below is an excerpt from the newsletter, along with several recent […]

Nygren: Dividends Will Be Key

In his first-quarter letter to shareholders, top fund manager Bill Nygren of Oakmark says that he’s keying on companies that are putting their cash to work. “Corporations today have unusually strong balance sheets and are generating much more cash than they can profitably reinvest in their own businesses,” Nygren writes. “Unless managements just let the […]

High-Dividend Stocks for the Gurus

In his latest column for MSN Money’s Top Stocks, Validea CEO John Reese highlights a handful of high-dividend stocks he thinks are worth a look right now.  “In the months leading up to the fiscal deal, high-dividend stocks have been taking some hits,” Reese writes. “While fiscal cliff and higher taxes on dividends may not […]

Top Dividend Manager Talks Strategy

T. Rowe Price’s Tom Huber, whose Dividend Growth fund is in the top 13% of funds in its category over the past five years, according to Morningstar, says that tax increases associated with the fiscal cliff aren’t reason to avoid dividend-paying stocks. “There is a lot of discussion and worry [about the tax hikes] more […]

Don’t Ignore The Dividends

The Wall Street Journal’s Matt Phillips has a simple message for investors: Do not forget about dividends. “Dividends matter! Dividends matter! Dividends matter!” Phillips writes on the Journal’s “MarketBeat” blog. He references recent commentary from Standard & Poor’s Howard Silverblatt as proof. “We are near another all time high for total return, even as stocks […]

Dividend Data Points to Market Being Undervalued

MarketWatch’s Mark Hulbert says that the stock market is “closer to undervalued” than overvalued, and that the market is “poised to produce above-average returns over the next couple of years.” Using data from Investment Quality Trends, Hulbert looked at stocks of some of the “highest quality and most profitable companies, as defined by criteria such […]

Zweig: Dividends Aren’t Easy Money

While investors overall are still lukewarm on U.S. stocks, one section of the market they have been keen on in 2012 is dividend stocks — perhaps too keen, says Jason Zweig. In his Intelligent Investor column for The Wall Street Journal, Zweig says that so far this year, investors have put a net of $9 […]

OSAM: Shareholder Yield Surpasses Dividend Yield

While paltry fixed-income yields have had investors on the prowl for high-dividend stocks, James O’Shaughnessy’s firm says they should be looking in another place for yield. “Though dividend yield works very well internationally, investors in U.S. stocks should instead focus on shareholder yield, a factor we have long advocated that has provided considerably stronger returns […]

Siegel Sees Historic Buying Opportunity

Wharton professor and Stocks for the Long Run author Jeremy Siegel says stocks are as cheap as they’ve been since the early 1950s, when the interest-rate climate is taken into consideration. Siegel tells CNBC he doesn’t think that Europe’s debt crisis will lead to a Lehman Brothers-type event. He says he “loves dividend-paying stocks”, and […]

Doll: Focus on Dividends and Free Cash Flow

Blackrock’s Bob Doll says investors should focus on firms that pay strong dividends — but make sure that the firms have the free cash flows to raise their dividends. “Dividends work if the company raises the dividends. It’s about free cash flow, not the dividend” itself, Doll tells CNBC. “In a world that we muddle […]

Reese: Look to Dividend Stocks, Not Treasuries

In his latest article for, Validea CEO John Reese says that dividend-paying stocks — not Treasury bonds — are a good place to look for yield in the current market environment. With investors flocking to the perceived safety of Treasury bonds amid the U.S.’s economic fears, yields on Treasuries have plunged. “Annual returns of […]

Focus on Dividends, Siegel Says

Wharton professor and author Jeremy Siegel says dividend-paying stocks — not Treasury bills, which he says are back in “bubble” territory — are the place investors should look for yield. “Despite the slow growth over the past decade, U.S. corporations, as typified by those in the S&P 500 Index, have been making record profits by […]

Don’t Forget The Dividends — And Inflation

Investors may spend a lot of time fretting over whether their portfolios are going up or down. But, despite all of the advances in stock market data availability, many may not be getting an accurate picture of what their portfolios are really doing, says The Wall Street Journal’s Jason Zweig. According to Zweig, after last […]

Siegel: Market Still Cheap — Very Cheap

Wharton Professor and author Jeremy Siegel says stocks are more attractively priced than they’ve ever been during ultra-low interest rate periods, and says investors looking for yield should turn to high-dividend-paying stocks. Price-to-earnings ratios around the world are reasonable and the quality of earnings is extraordinarily high, Siegel said at a Canadian Imperial Bank of […]