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Top 10 Dividend-Yielding Stocks of Our Top Managers

Our Ultimate Stock-Pickers have found yield in some beaten-down stock sectors.

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By Greggory Warren, CFA | Senior Stock Analyst

About a year ago, the Ultimate Stock-Pickers Team put together an article that highlighted some of the better yielding stocks held by our top managers coming into 2010. With investors continuing to plow money into fixed income funds at a record pace, and equity valuations starting to look a bit stretched after close to two years of market gains, we thought it would be a good time to look at dividend paying stocks again--especially those held by more than a handful of our Ultimate Stock-Pickers.

Not everyone pays close attention to dividends, and some investors see dividends as a sign of poor growth prospects, but in the long run dividends can actually help investors earn superior total returns. In his 2005 book, "The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New," renowned market commentator Professor Jeremy Siegel identified dividends as one of the key drivers of long-term equity outperformance. While companies paying dividends may not grow as fast as successful non-divided payers, his research showed that the income they generate, in addition to the signals that dividends send about financial strength, business stability and capital discipline, have been extremely valuable for long-term investors.

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The Morningstar Ultimate Stock-Pickers Team does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.