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7 Best Dividend Stocks for a Rocky Market


With stocks slumping over the past year and the market gyrating wildly so far in 2016, it looks like a good time to settle down with solid, dividend-paying stocks. If share prices resume their slide, dividends can provide some income to cushion the losses. And small but regular dividend payments can add up to big gains over time.

Historically, dividends have generated about 40% of the market’s total returns (the rest has come from price gains). Moreover, dividend payers tend to lose less than nonpayers during downturns and vault ahead of the broader market over long stretches.

One knock on dividend stocks is that they’ll falter if interest rates turn up. Stocks bought mainly for their payouts become less attractive than bonds as rates climb, the argument goes, so the share prices must come down to bring their yields closer in line with those of fixed-income investments. And high-yield stocks tend to be more sensitive to that effect. But with the economy looking feeble, rates aren’t likely to rise much this year.

We chose five firms that are steadily boosting earnings and dividends along the way, measures that should help lift their stock prices, along with two high-yield stocks that seem worth the extra risk.

All prices and returns are as of March 1; price-earnings ratios are based on estimated profits for the next 12 months. Stocks are listed alphabetically.

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