Is the Dow Keeping Too Much of Your Money?

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In the following video, analyst Austin Smith helps investors answer the question "Is the Dow Jones Industrials Average keeping too much of my money?" As an index, the Dow has a reputation for dividends. All of the components on the index pay dividends, but at only 2.9%, investors may be left wanting a bit more. It's important to remember that dividends are one way Dow components return money to us partial owners; the other is through share repurchases. When looking at the five-year track record of the Dow's earnings compared to its dividends and share buybacks, it actually looks like the Dow is giving us just about all it can afford.

The index is composed of weak and strong companies alike, and if you really want to get your money's worth, you have to look at exceptionally strong and generous individual stocks. Let me invite you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and learn about the stocks that can make you rich. 

Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and JPMorgan Chase and has the following options: short OCT 2012 $55.00 calls on American Express, short OCT 2012 $60.00 calls on American Express, and long OCT 2012 $65.00 calls on American Express. Motley Fool newsletter services recommend American Express. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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