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Stockpickr) -- Too often, there's a battle between income investors and investors chasing capital gains. Would you rather take a reliable income check on your portfolio, or would you prefer share price appreciation? That question may drive some great debates in an MBA class, but it's a whole lot less relevant to the real world.
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I'm happy to report that it's not an either/or. You can have both.
In fact, dividend payouts and capital gains are more complementary than anything else. The data bears that out too. Over the last three and a half decades, dividend stocks have outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, based on data compiled by Ned Davis Research.
But instead of looking for industries with high yields, it makes sense to approach the problem the other way around: by seeking out industries with high stock performance and then backing into individual high-yield names. By focusing on sectors with
high relative strength first, you skirt the typical catastrophes that come from chasing yield.
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So that's why we're looking at health care stocks. Health care is on a tear in 2013. While the
S&P 500 has churned out some impressive gains year-to-date, big health indices are up more than 38% over the same time period. That's more than 10% outperformance. And short-term, health care stocks have been widening the gap even further.
So as the year draws to a close, here's a look at
five health care stocks offering up a mix of income and capital gains right now.