Despite an impressive market rally that has major indexes up around 65% off the March 9 lows, there are still a number of blue-chip stocks delivering handsome dividend yields. Exchange traded funds (ETFs) can give a diversified play.
Yields upwards of 3% are being offered by some well-known names, including Kraft Foods (NYSE: KFT), Clorox (NYSE: CLX), Sara Lee (SLE), Sysco (NYSE: SYY), Johnson & Johnson (NYSE: JNJ) and Verizon (NYSE: VZ).
Finding these names is a matter of doing a little detective work. One clue is “value” stocks. Because they’re generally more stable, they can be a better long-term investment, explains Brett Arends for Yahoo Finance. Defensive industries include food and beverage, health care, personal care, household goods and telecommunications. (Why have dividends outperformed growth shares).
Arends cautions investors to beware dividends that are too high – one in the double digits can be a red flag because it means the market expects the payout to be cut or that the business is being wound down.