The stock market is not an attractive place to make money as the junk bond market. But there is something about dividend-paying stocks that will always make them an attractive investment. The key, however, is to spot trends that are happening now and to recognize that industries are changing.
It was thought that tech stocks were mainly growth stocks that invested in themselves rather than paying out dividends. But, a look at the S&P 500 dividends payouts reveals that tech stocks have paid out a lot of dividends and are only second place to the consumer-staples industry.
Tech stocks have been doing very well lately, but industry leaders like Google and Apple are yet to pay out dividends. But this could change soon. For now, Microsoft, Intel and IBM are great buys for their dividend yield which may be comparatively small but still good. The thing with these tech giants that makes them attractive is their healthy balance sheets and solid cash flow.
The basic philosophy behind dividend investing is to look at industries and companies that have the capacity to pay out dividends today and tomorrow as well. Health care and utilities spring to mind and these are actually good value stocks to have in a portfolio too.
The stock market has really changed since the 1990s. In 2012, a dividend investor will find that the fastest-growing industries tend to have the best dividend stocks. It helps to look out for these dividend paying stocks by reading publications like the Wall Street Journal.