Yesterday's MarketBeat blog in the Wall Street Journal featured an entry titled Drumbeat for Dividends Grows, which highlights the fact that more and more analysts are calling for companies to raise their dividends in light of the historically low payout rates that current exist. While we at Foothills Financial Planning and the Camelback Fund are pretty loathe to be aligned with what is trendy in the world of investing, we're not at all surprised that the world has woken up to the fact that many dividend companies are good values right now. The fact that payout rates are relatively low underscores the fact that many dividend payors are perfectly capable of covering their dividends long into the future.
Also, note the recent performance of the S&P 500 companies whose dividend yields exceed the average yield on 10-year corporate debt. Per the post, they have outperformed their S&P 500 peers by 700 basis points since April.
Wow.