Citi says investors should focus on dividends, lists several buy-rated income stocks to buy

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Mastercard Inc,Visa Inc,Stock Markets

As a lower interest rate environment begins to materialize, investors can turn to dividend-growing stocks for a steady income stream.

As the Federal Reserve considers lower rates in the near future, it may be time for investors to consider dividend-paying stocks as another income stream, according to Citi. Lower interest rates would mean that some investments, such as fixed income assets, will look less attractive than they once did. Therefore, investors would be more incentivized to buy companies that have a strong record of dividend payments.

In the same report, Chronert screened for stocks in the S & P 500 that have the potential earnings power to grow their dividend payouts this year. The stocks had to meet the following criteria: Buy-rated by Citi Research 3-year dividend per share with a compound annual growth rate above 5% Above median expected dividend growth Potential dividend per share upside Reasonable payout ratio Reasonable dividend yield One name on the list was Visa , which currently has a dividend yield of 0.

 

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