NEW YORK, NY--(Marketwire -02/08/12)- With the S&P 500 skyrocketing in the early stages of 2012, investors are shifting away from dividend-paying stocks. According to a recent article from The Wall Street Journal (WSJ), dividend payers often are not perceived to have the same potential for earnings and revenue growth as smaller firms. "When the rest of the market is booming, dividend payers are often lagging behind the crowd," the WSJ argues. Five Star Equities examines the outlook for diversified REITs and provides investment research on American Capital Agency Corporation (NASDAQ: AGNC - News) and ARMOUR Residential REIT, Inc. (NYSE: ARR - News). Access to the full company reports can be found at:
In 2012, non-dividend-paying stocks on the Standard and Poor's 500 are up more than eight percent, while dividend payers are down approximately 1.3 percent and the index as a whole is up close to five percent, data from Bespoke Investment Group finds.
While it is possible that dividend stocks could trail this year, Jack Ablin, chief investment officer of Harris Private Bank, told Reuters that "long term, dividends have accounted for nearly half of the S&P 500 investors' total return." Last year, dividends accounted for all 2 percent of the S&P 500 index's total return, according to an article from Reuters.
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Earlier this week American Capital Agency announced that its Board of Directors has declared a cash dividend of $1.25 per share for the first quarter 2012. The dividend is payable on April 27, 2012 to common shareholders of record as of March 7, 2012, with an ex-dividend date of March 5, 2012. "At its current level, the $1.25 per share dividend represents a dividend yield of approximately 17%," Gary Kain, AGNC President and Chief Investment Officer explains.
ARMOUR Residential REIT presently pays an annual dividend of $1.32 per share for a hefty yield of around 18.8 percent. Last week the company announced that it has priced an underwritten public offering of 26,000,000 shares of common stock.
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