These are companies with robust cash flows and sustained dividend visibility
According to 2008 research by Stefan Nagel of Stanford GSB, “investors are more likely to spend dividends and reinvest capital gains.” The basis of this behavior is elaborated by the theory of mental accounting, which was discussed by Richard Thaler in 1980. According to the theory, consumers don’t see capital gains and dividends as interchangeable. The idea is to consume income, not principal. And dividends are considered as a source of regular income. With this in mind, it explains the reason for investor attraction towards dividend stocks.
This discussion seems relevant for the near-term with the holiday season approaching. Some quality dividend stocks can boost investor income for holiday spending.
Additionally, dividend stocks are generally low-beta stocks. And with a Fed tapering round the corner, some volatility can be expected. So it would make sense to go overweight on low-beta stocks.
In turn, there are seven dividend stocks that look attractive to me for the near-term, as well as the long-term. Additionally, I believe that these stocks seem undervalued with upside potential. They are:
This article originally appeared at InvestorPlace.