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Barron's: 5 Stocks With Safe and Growing Dividends for a Low-Rate World

Barron's: 5 Stocks With Safe and Growing Dividends for a Low-Rate World
(Stock Photo Secrets)

By    |   Wednesday, 09 October 2019 09:08 AM

Savvy investors seeking yield at a time of potentially negative interest rates reportedly have to be very shrewd to find safe harbor in dividend-paying stocks.

“In a low-rate world, equity investors need to be prudent—snobby, even—about their yield allocations,” Barron’s recently explained.

Nick Getaz, co-manager of the Franklin Rising Dividends fund (FRDPX), says that consistent dividend growth is often “an indicator of a very strong business model and typically a resilient one.”

Barron’s recently picked a handful of companies which “have all increased their dividend for at least 25 straight years. Their chances of more increases look solid.”

  1. Illinois Tool Works (ITW)   
  2. Johnson & Johnson (JNJ) 
  3. Nucor (NUE)
  4. Pentair (PNR)     
  5. W.W. Grainger (GWW)     

Meanwhile, there have been reports of a very esoteric theory on why certain companies pay higher dividends.

Gender-diverse corporate boards result in higher dividend payments, according to academics including Chen Xiao of The Chinese University of Hong Kong, Shenzhen, who found a significant positive relationship between board gender diversity and both the likelihood and level of dividend payments. Their results were published in the October edition of the Journal of Corporate Finance.

“Using various measures of board gender diversity, our results generally support the proposition that a gender-diverse board is more likely to pay a dividend compared to a single-gender all-male board,” they wrote. “Moreover, firms with higher board gender diversity tend to pay larger dividends.”

The paper adds to research showing the corporate benefits of gender diversity. Asian companies with more women board members achieved better financial results than those dominated by men, according to a study by the International Finance Corp. Stanford Graduate School of Business found positive share price effects from greater workforce diversity.

Women directors are more associated with good corporate governance and are more inclined to promote the interests of all shareholders, the researchers hypothesized in this latest study of 8,876 companies from 22 countries from 2000 to 2013. This promotes the payout of dividends, they said.

“Studies suggest that gender diverse boards are more likely to make well-reasoned decisions and more inclined to promote shareholders’ interests,” they wrote. Consequently, they “are more inclined to initiate dividends and set higher dividend payout ratios.”

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Savvy investors seeking yield at a time of potentially negative interest rates reportedly have to be very shrewd to find safe harbor in dividend-paying stocks.
dividend, stocks, low, rate
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2019-08-09
Wednesday, 09 October 2019 09:08 AM
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