SAYING YES TO DIVIDENDS

Caution:

Even before President Bushannounced his proposal to eliminatethe tax on corporate dividends, investorswho sought out dividend-payingstocks were having a party.According to Weiss Ratings (800-291-8545; www.weissratings.com),an independent financial rating service,dividend-paying stocks enjoyeda 5.1% return last year, comparedwith a loss of 22.1% in the S&P 500,and an average loss of 17.3% for non-dividend-paying stocks. The totalyield on the dividend-paying stocksincluded an average dividend of3.9%, plus an average price gain of1.9%. High dividends arenot always a sign of a good investment,according to Weiss. Sometimesdividend yields are actuallyup because the stock is tanking. Infact, of the more than 2000 dividend-payingstocks that Weiss tracks, only725 get the company's favorablerating of B+ or better.