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Investing Specialists

Top 10 Dividend-Yielding Stocks of Our Top Managers

Our Ultimate Stock-Pickers have tapped into some higher-yielding holdings.

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By Jaime Peters, CFA, CPA | Senior Stock Analyst

Earlier this year, the Ultimate Stock-Pickers team put together an article highlighting some of the better-yielding stocks that our top managers held coming into 2011. Since that time, unrest in the Middle East, natural (and not so natural) disasters in the Asia-Pacific region, an ongoing European debt crisis, a falling U.S. housing market, a pathetic showing for domestic job creation, and the impending end of QE2 have all had an impact on the markets. While the S&P 500 Index (SPX) had held up well through much of this turmoil, rising 6% during the first quarter (and another 3% in April), it has given back almost all of those gains during the last six weeks, with the benchmark up less than 2% for the year at the end of last week. The roller coaster of market returns that we have seen so far this year has many investors yearning for returns that cannot be taken away so readily--that is to say, dividends.

So it should not come as too much of a surprise that industries that have historically been popular because of their higher-yielding stocks have performed well in 2011. The PHLX Utility Sector Index, for example, which is comprised of geographically diverse U.S. public utility stocks, is up 4% since the start of the year on the continued strength of regulated utilities. Meanwhile, the Dow Jones REIT Indexes, which capture the performance of real estate investment trusts, are both up around 4% in 2011, despite all of the uncertainty that has surrounded the real estate markets this year. Also worth noting it's the fact that the four fund managers in our Investment Manager Roster that specialize in generating income for their investors-- Amana Trust Income (AMANX),  Columbia Dividend Income (LBSAX),  Oakmark Equity & Income (OAKBX), and  Parnassus Equity Income (PRBLX)--were either beating or very close to beating the S&P 500 at the end of last week.

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