If there is one recurring theme in many phone calls, I have gotten from my mostly elderly clients this year, it’s something like this… “Should I sell all my stocks and get out of the market?”
I get where this fear is coming from. Their life savings feel at risk when stock values are going down. My stock answer is, “Hold on. What goes down must go up. Historically, the stock market has always had big ups and downs, but it averages a very healthy up.”
As I think about which clients have much less fear of the current market, I keep finding a commonality. They are heavily invested in Qualified Dividend producing stocks.
One of the HUGE benefits of Qualified Dividends is their tax treatment. They are taxed using the much more favorable Capital Gains tax rates instead of regular tax rates. For some of my retired clients who have hit the sweet spot, they pay little or even zero tax on their qualified dividend income!
Qualified Dividend paying stocks, which provide stability and income to a portfolio, are sometimes derided as boring or stodgy compared with higher-octane growth stocks. But boring can be beautiful. In the challenging economic times we find ourselves in, those “boring” qualified dividend paying stocks can be wonderful and refreshing.
Here are a few of the top dividend paying stocks with great track records for you to consider.
McDonald’s. This last year, they paid $5.52 per share and rose in price, giving a double whammy benefit.
Proctor & Gamble. They paid only $3.48 per share but rose in price even better than McDonald’s.
Johnson & Johnson. Their dividend per share last year was $4.24 per share. Not as good as the other two above, but their stock value rose above a normal range last year as well.
Home Depot paid $6.60 per share and the stock price shot up, but maybe only temporarily.
Lockheed Martin paid the highest dividend rate I found last year of $11.20 per share. Their stock price also went up a healthy amount.
Wal-Mart didn’t do as well last year but is a solid player in the long run. Their dividends paid last year were only $2.20 per share.
There are quite a lot of good dividend paying stocks out there. Such as utility stocks. Entertainment stocks, etc. For information, talk to a good stockbroker to tailor your holdings to your specific goals.
Have you heard? Prov 11:18 says, “Wicked people earn deceitful wages, but one who sows righteousness reaps a sure reward.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com. Also on Facebook.