The Standard & Poor’s 500 Index has a dividend yield of 2% compared to almost 5% for the European stocks and about 2.5% for the Japanese. U.S. companies are able to pay higher dividend due to strong earnings in an otherwise challenging market. This does not mean that you look into foreign stocks for yield.
Choices at home for investors are very limited. Bonds and short-term deposits are yielding next to nothing or near zero. Yields are near 50 year lows. Corporations are opting for buybacks instead of paying dividends.
What should investors who are retired and on Social Security look for? If you are depending on higher yields on your investments, you should look for higher dividend paying stocks of US companies for income.
Look into the companies in the telecom sector. On average, they pay about 5.5% yearly dividends. Another sector that has an average of 4% dividend yield is utilities. Also, there are individual stocks to consider. Time Warner increased its annual dividend to 4%. AT&T pays an annual dividend of 5.8%. Other stocks to consider: Lockheed Martin (4.8%), Merck (4.3%), NYSE Euronext (4.4%) and Pfizer (4%).
