growth V dividend players23 Jun 2013 17:32
I was on the VOD msg board,and were talking about dividend stocks were NOT the place to be now around about 6mths ago. I was on www.Marketwatch.com and come across this article stock picking...
Thus is possibly one of the growth stocks with respect to increasing dividends and also potential for growth in shareprice...though only in short-term...
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Choose dividend growth over yield
Much of the first-half of the year investors focused on high-dividend payers out of a search for yield. In May, those stocks became overvalued and sold off as Treasury yields bounced higher.
What investors need to focus on now are stocks that offer a high potential for dividend growth rather than a high yield, said Charles Rotblut, vice president at the American Association of Individual Investors.
For one thing, high potential for dividend growth indicates a healthier balance sheet, as opposed to no-growth high-dividend stocks.
One sector that Rotblut recommends is technology, given it’s relatively new to the dividend scene and companies have large amounts of cash that can be handed to shareholders in the form of a dividend. Examples of tech companies with an attractive yield as well as a long track record include Microsoft Corp. (MSFT) and Intel Corp. (INTC) , Rotblut said.
In fact, of the top 10 companies on the Select Sector Technology SPDR ETF (XLK) nine — with Google Inc. (GOOG) being the sole exception — pay dividends.
But don’t write off bonds just yet. Recently, bond guru Jeffrey Gundlach of DoubleLine Capital said . He expects the yield on the 10-year Treasury (10_YEAR) to finish 2013 around 1.7% — sharply lower than the benchmark’s current yield of almost 2.2%.
Added Rotblut: “If you look at the pace of inflation, it doesn’t point to an inflationary environment. The increase in bond yields is going to be modest. May was a trade by momentum traders and that’s a big argument to stay in bonds.”
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