Investors Run to Safety of Top Dividend Stocks
BOSTON (TheStreet) -- The rollercoaster stock market has investors running for shelter in the form of top-rated companies that pay high dividends or mutual funds that invest in them.
All U.S. equity mutual fund categories have seen large outflows this year, except for so-called equity-income funds, which took in $11 billion through Aug. 10, Standard & Poor's said. Investors are piling into the safest stocks as the U.S. economy is slowing. Just today, Morgan Stanley lowered its forecast for global economic growth.
The firm's MarketScope Advisor unit recently highlighted its three top-rated "five-star" equity-income funds that are benefiting from those flows and suggests that "investors should follow suit" in their investment choices.
Those funds are the $4 billion Columbia Dividend Income Fund (GSFTX), which has a yield of 2.36% and a loss of 3% this year; the $5.8 billion Vanguard Dividend Growth Fund (VDIGX), which has a yield of 1.99% yield and a loss of 0.7%; and the $5.6 billion Vanguard Equity Income Fund (VEIPX), which has a yield of 2.72% and a loss of 0.2%. The benchmark S&P 500 Index of U.S. stocks, in contrast, has fallen 4%.With that in mind, we reviewed those funds and came up with seven stocks that they added to significantly or initiated stakes in during the second quarter: The Columbia Dividend Income Fund about doubled its stake in Linear Technology (LLTC) to 539,000 shares, or 0.5% of its portfolio. The company, with a market value of $6.2 billion, makes high-performance analog integrated circuits for the industrial, automotive, communications and high-end consumer electronics industries. It carries a dividend yield of 3.53% and its shares are down 20% this year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV