With many Wall Street pros predicting a lackluster stock market for the rest of the year, safe income-producing stocks may be a good place to park the equity exposure of your portfolio. Getting paid to own a stock in the form of dividends is certainly a bonus, especially when things look dicey (see BusinessWeek.com, 9/5/06, "Making Dividend Plays Pay").
Income-producing stocks aren't just for retirees anymore. In fact, along with offering a nice cushion in flat or down markets, companies that pay dividends have been shown to outperform ones that don't. In general, companies that keep raising dividends each year show that they're healthy, and that they're generating enough cash to give back to shareholders.
This week's screen scouted for stocks with a dividend yield greater than 3% and a five-year average annualized dividend growth rate greater than 12%. In comparison, the S&P 500 index currently has yield of 2.16% and a dividend growth rate of 10.3%.
Each stock selected carries a 4- or 5-STARS Ranking (buy or strong buy) from S&P Equity Research and an S&P Quality Ranking of A- or better.
Only a handful of stocks made the cut: