The stock market has certainly had an up and down tendency during the year 2010. I have written some articles about this volatility in the year 2010. With both “finding dividend paying stocks” and the article “predicting stock market returns” I talked about what to do to make profits with the current situation. I also wrote about doing the opposite with “contrarian investing”.

I wanted to discuss further dividend paying stocks. It seems that this selection is even more important with the current situation in June, 2010. We have certainly had a rocky road with our investment strategy. One sector that a person should look into would be the utility stocks. They, like many other sectors, are currently beat up. Yet even with this, they are a good value due to the amount of dividends they pay.

In the June, 2010 edition of Utility Forecaster, the author Roger Conrad discussed his feelings on utility mutual funds. It is his feeling that the managers are doing nothing more than churning their stock holdings to try and make it to the top of the heap. They do not stick around long enough to collect the dividends and they also rack up enormous fees. He feels that an investor can do better if they just trek out on their own. They can do their own research and determine those companies which are the most stable and have a long-term history of paying dividends. Even with this he does have some recommendations on some Utility ETF’s. You can find his article at.. [updating]

There are many different utility and telephone companies which have consistently paid high dividends. One of these companies I found is “CEL” which is actually a wireless telecom company in Israel. Since 2007 they have paid 12 percent dividends. This is not a bad return and with the increase in stock price as a boot, how can you go wrong. The company seems to have some risk since it is based in Israel, and one never knows what is going to happen there. However, the point is that there are other utility and telecom companies which provide these high dividends.

It would be my suggestion that you use a screen filter to find oversold, dividend paying stocks which have a consistent history of paying their dividends. You do need to be careful when selecting your dividend paying stocks. There was a recent article in the Wall Street Journal which discussed dividend paying companies which decided that they would discontinue the paying of dividends due to cash flow problems. You will never actually know if a company is going to experience this problem, but if you look for at least five to ten years of dividend paying history and a good solid company with a believable financial record, then the chances are better than most that they will continue to pay dividends.

Tags: dividend paying stocks, make money, utility, utility forecaster, volatility