Since you seem to be the type of person who plays it safe (you AA is low in stocks), I would suggest you not buy individual companies, but stick to broadly based etf's or the low cost vanguard mutual funds.
Chasing dividend returns could have you buying a stock that pays a dividend of 6-8% and loses value of 10% or more in a year. At least with broadly based instruments there will not be a catastrophic decline because a company goes bankrupt.
But sometimes people want or need dividends when they need more income than the 1.81% that the Total Stock market provides.
Not everyone winds up at the end of the road in the same way. Meaning many people didn't work for mega corps with fund matching 401K's and a two income families with a long term savings horizon.
Some people got there late in life stash from real estate or a business they owned and sold, and want to enter the market closer to their retirement years, and because they don't have any pensions to help with cash flow, then more may be needed from the portfolio to meet expenses. Many new retirees were counting on having 5% bonds and 6% CD's available when they retired to help with cash flow.
Most people would rather be able to obtain that income from dividends and interest, because there is not always appreciation, and since they are not accumulating anymore, the possibility of buying into a downward trajectory or even a sideways trajectory can be pretty scary.
I understand fully how a growth approach works to someone's favor over a long term horizon. But not everyone chose this model or had the option. This couple, and many others like them are retiring and need income.
What I don't understand, is how someone can argue that there is really no difference in withdrawing from only dividends or from capital appreciation. Sometimes there is
no appreciation for a long time, so it's the principal (the seeds) that must be sold to raise capital.
What about the times that saw a continued sideways or down spiral, some lasting over 10 years. Would not that individual be better off with having a larger income stream instead of growth stocks then and having to rely on appreciation? Those two to three years cash reserves would hardly see someone through this kind of market?
What I don't understand is the logic when someone who has followed the total return approach says there is no difference where the money comes from. I am not in favor of tilting too far into bond funds either, as then you can lose due to inflation. I'm speaking of your typical 60/40 mix. (not that bonds would give you any income lift
today)
Trying to create an income portfolio today is very chalanging for retirees if you would just like to stay in indexes unless you have a very large portfolio. Otherwise you have to venture out into junk bonds, individual stocks, MLP's, and preferreds to get there. (or some other stuff that is above my pay grade) All the typical sources of income to help retires with an income flow have vanished today, so income to help retirees retire requires a little more than it did in the past.
I think the suggestions as to where to look might be more appreciated by posters seeking income. I don't think anyone today is expecting 7 to 10% dividends or bonds. Just somewhere to look to
possibly give a bump to their yield in a sensible manner, and who better to ask than people on this board.
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But that is money on top of money though. That means the underlining company I assume is doing quite well. Now would they be doing even better if they reinvested it? Who knows, depends on how they put the capital to use. But I am an extreme dividend lover hence being in preferred stocks for income. 
