There's no totally safe play in stock investing, but companies that pay generous dividends can smooth out rough spots -- while throwing off a yield that beats Treasuries.
Although the S&P is down 8.9% this year, stocks of firms that consistently offer sizable dividends have fallen just 5.9%. Moreover, "dividends will probably play a bigger role in returns over the next decade," says Andreas Utermann, global chief investment officer for RCM Informed, an asset-management company.
The five companies below have raised their dividend consistently for the past 25 years or more and use 55% or less of earnings to make payouts, meaning they're less likely to have to pare their dividend if business slows. Their stocks also recently had higher yields and lower price-to-earnings ratios than the average stock.
S&P 500 yield: 2.2%
P/E: 12.5
3M (
MMM)
Household and industrial product maker Yield: 3.0%;
Payout ratio: 36.5%;
P/E: 10.9
Emerson Electric (
EMR)
Global manufacturing firm Yield: 3.3%;
Payout ratio: 43.8%;
P/E: 11.4
Stanley Black & Decker (
SWK)
Power-tool makerYield: 3.4%;
Payout ratio: 41.8%;
P/E: 8.3
Johnson & Johnson (
JNJ)
Mega-size health care firm Yield: 3.7%;
Payout ratio: 52.4%;
P/E: 11.6
Abbott Laboratories (
ABT)
Pharmaceutical company Yield: 3.8%;
Payout ratio: 54.5%;
P/E: 10.2
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