5 Equities For Retirees Yielding Over 4%

By Bear Fight: << Return to Part I

By Bear Fight:As we go into an uncertain 2012, many retirees looking for yield have sought dividend paying stocks as an alternative to fixed income and bank deposits. While the dividend yield on the S&P500 is around 1.9% there are many high quality, large market capitalization companies that retirees should investigate to bolster income in their portfolios.

By Bear Fight:Investors are fretting about stagnating equity market prices and a “lost decade” for the U.S. economy. Investors have already experienced their own lost decade in U.S. equities. While the 2000s ended with the bursting of the tech bubble and an overbought stock market, the last 10 years of no price appreciation helped valuation. (Click chart to expand)

By Bear Fight:As market prognosticators point to a “lost decade” for the U.S. economy, investors have already experienced their own lost decade in U.S. equities. While the 2000s ended with the tech wreck and an overbought stock market, the last 10 years of no price appreciation has helped valuation. Earnings and dividends of large-capitalization companies have grown over last decade creating opportunity for value investors. With the 10-year U.S.

By Bear Fight:Despite a strong start to risk markets in 2012, markets are likely to remain volatile due to a number of economic and geopolitical issues.

By Bear Fight:Retirees focused on generating yield from their savings have sought dividend-paying U.S. equities as short-term rates remain low. Retirees looking to protect their portfolio from dividend cuts should review a company's payout ratio to assess the health of its dividend. Unlike fixed-income securities, dividend-paying equities can experience cuts to dividends due to falling earnings.

By Bear Fight:Telecom equities provide investors with strong cash flow due to their stable recurring business models. Commercial and residential subscribers sign up for annual or long-term contracts, providing strong revenue visibility.

By Bear Fight:As the high sovereign debt levels hinder the global economy, retirees seeking yield have been hurt by ultra-low interest rate policies from world central banks.