CHICAGO, June 1 (Reuters) – Finding consistent total stock
returns has always been a challenge. But even as the euro zone
beast continues to flair its nostrils and U.S. employment
wheezes, there are stocks that are worthy contenders,
particularly ones that pay dividends. While they don’t eliminate
market risk, dividends can bolster total return in skittish
equity markets. And some of the best sectors for high-dividend
players are far from Wall Street.
For long-term investing, think commodities, energy,
utilities and non-banking financial services. Banking is still
touchy, but insurance is a safer bet.
Established, brand-name stocks often pay large dividends,
but that doesn’t mean they should dominate your portfolio. The
Admiral Group, a U.K.-based auto insurance company, for
example, is hardly in a league with the oil producer Royal Dutch
Shell in terms of name recognition. Yet the insurer is
the top holding in the SPDR S&P International Dividend ETF
, paying a 5.38 percent dividend yield as of June 1.
Shell, by the way, is no slouch in the dividend department
either, paying 5.53 percent as of the same date. Europe’s
largest oil producer reported that its earnings were up 11
percent in the first quarter.
The international dividend strategy is often rooted in
sectors in which profits are consistent and growing. That
translates into steady dividend growth year after year, although
the sectors that are favored for stock-price appreciation will