Yield Stock in Bear Market

Just want to quote an encouragement type of story (previously published on BT, if I am not wrong) to share with the group of investor who hunting for yield stock:

Altria, formerly Philip Morris, famous for its world's best selling cigarettes brand, Marlboro, was also very well known for its high dividend payments to its shareholders. A sum of US$1,000 placed in Philip Morris back in 1957, with its dividends reinvested, would have grown to almost US$4.6 million today, according to Jeremy Siegel's 2005 book, The Future for Investors.

**(Investsgx: Based on last Friday closing price, Philip Morris is traded at $42.20, with 52-week high $56.26 and 52-week low at $33.30. The range of trading price clearly indicated a classical behavior of blue chip with stable yield in bear market.)**

Investors who reinvest their dividends and accumulate more shares during the bear markets will eventually recoup the price loss because the lower price allows them to own more shares than they would be able to buy if the stock had not declined. Consequently, the value of these extra shares will surpass the magnitude of the stock price declines, making these investors better off overall.

**(Investsgx: Stay tune and cheers!)**
**(Investsgx: http://forum.channelnewsasia.com/viewtopic.php?t=195250

Dividend yield is relevant and will always relevant.

What we need to ascertain is to find out whether the company will be able to sustain its dividend payout over the long term.

Suggest to look at 2 payout ratio:

Payout Ratio of dividends as a percentage of free cash flow
Payout Ratio of dividends as a percentage of net income

The stocks with low payout ratio are more likely to sustain the dividend payout. For stocks which close to 100% or even more then that, we shall avoid it.

)**