3 Underrated Dividend Stocks for Your Portfolio

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Dividends play an important role for many investors. With interest rates remaining near historic lows and key demographic changes shaping future financial needs, dividends can provide a stable source of cash flow that exceeds the rate on bonds or savings accounts. They can also help investors lock in returns through years of stable payments. While dividends have gained popularity in recent years, there are some dividend-paying companies that are often ignored.

Last year, dividends paid by the world’s listed companies reached a record high of $1.03 trillion, according to the Henderson Global Dividend Index. Dividends are up $310 billion since 2009. The United States accounted for one third of the global total, while emerging markets made up $1 in every $7 of global payouts.

“The trillion dollar dividend is a huge milestone for equity investors and illustrates that dividends are now a vital component of investors’ returns,” said Henderson CEO Andrew Formica. “The search for income is more than just a response to rock bottom interest rates in recent years. It marks a generational shift as aging populations must increasingly rely less on state pensions and more on their own savings to provide for retirement. Not only that, but they will need to stay invested in equities much longer than in the past too. This demand for equity income is a trend we see continuing through 2014 and beyond.”

Let’s take a look at three dividend-payers that investors may want to consider for their portfolios.

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