Dividend Plays


Last year, companies handed out higher dividends to shareholders as corporations became more positive about future earnings.

S&P 500 companies paid $9.1 billion more in dividends in 2010 over 2009.

In today’s “Talking Numbers” we zero in on dividend paying stocks with Pankaj Patel, Managing Director of Quantitative Strategy at Credit Suisse.

For 2011, Patel believes dividend investing will return to more historically normal levels.

Here are some of Patel’s observations:

  1. Stocks with lower dividend yields outperformed stocks with higher dividend yields in seven of the twelve months in 2010
  2. History suggests it would be unlikely for low yielding stocks to remain the top performers much longer than April 2011.

Sectors With Yields

Patel recommends investors look at sectors with yield higher than 1.5% and payout ratio less than 50%. Highlighted in bold.


Patel said investors should look for dividend stocks that yield higher than 1.5% and have a payout ratio less than 50%.

Dividend payers in the Consumer Staples, Health Care, Industrial, Materials & Energy will see the best total return, said Patel.

Tune In: Check out Talking Numbers on Closing Bell today at 440PM ET.

Questions? Comments? Write toinvestoragenda@cnbc.com