Dividend Stocks
Stocks that provide dividends are an excellent way to build long-term wealth. Not only do dividends provide investors with regular income, but dividend stocks can also help investors weather market volatility. How? Whether the markets are going up, down, or sideways, dividends provide investors with a steady income stream.
Having said that, while dividends are usually paid out quarterly, at the discretion of the company’s board of directors, they can be raised, cut, or eliminated.
Not all dividend stocks are created equal. As a result, there are a number of factors investors need to consider when looking at dividend stocks.
Dividend yield is one of the most important factors to consider when investing in dividend stocks. It might be tempting to just invest in a stock with the highest dividend yield, but there is a risk/reward trade off when it comes to dividend-yielding stocks—the higher the yield, the greater the risk.
Stocks that provide an annual dividend of 10% or more tend to be very risky. Because they are risky, there is a greater chance the dividend could be cut—or worse, the share price could plummet. This means investors lose out on dividend growth and capital appreciation.
History is another important factor to consider. Look for stable companies that have a long history (five, 10, or even 25+ years) of both paying an annual dividend and increasing that dividend annually. Those stocks that offer annual dividend growth as part of their corporate culture are more likely to continue that trend.
The best way to determine whether or not a company can continue to provide an annual dividend and raise its yield is to look at the company’s free cash flow. Free cash flow is the amount of free cash, or money left over after it pays for operations and necessary capital expenditures. The more money a company has in the bank, the greater the chances are that it can sustain or increase its high dividend yield.
Shares of 10%-Yielding Hafnia Ltd Up 78% Since April
Hafnia Ltd Stock Has 60%+ Upside Potential In the spotlight today is Hafnia Ltd (NYSE:HAFN). The outlook for crude oil may have taken a hit of late, but the outlook for marine shipping companies remains robust. That’s due in part.
Why Income Investors Should Pay Attention to the U.S. Housing Market Slowdown
Big Disconnect Between the U.S. Housing & Stock Markets If you’ve been following the housing-related plays in your income portfolio—whether it’s real estate investment trusts (REITs), homebuilder dividends, or housing finance stocks—it might be time to take a closer look.
Pembina Pipeline Corp: Ultra-High-Yielder Hits Record High
Wall Street Sees More Upside for Pembina Pipeline Income investors like energy stocks because the world runs on oil, and will continue to. Moreover, energy stocks that make a lot of money provide some of the frothiest dividends on Wall.
Could 5%-Yielding Smith & Wesson Stock Have 60%+ Upside?
SWBI Stock Up 16% Over Last Month When it comes to stocks, people are more inclined to invest in some stocks and avoid others. So-called “sin stocks,” like gambling, tobacco, cannabis, adult entertainment, and aerospace and defense stocks are the.
7.6%-Yielding South Bow Corp Stock Thumping the S&P 500
SOBO Stock Up 17% Year to Date Oil prices have taken a big hit on concerns about a glut of crude and what a global trade war could do to demand. West Texas Intermediate (WTI) is trading near $57.00, the.
NKE Stock: A Solid Income Play Hiding in Plain Sight?
NKE Stock Checks All the Right Boxes for Income Investors When investors think of Nike Inc (NYSE:NKE), they think of sneakers, athletes, and sports culture—not dividends. NKE stock is often grouped with consumer brands built for growth, not income. But.
Outlook for 11%-Yielding MNR Stock Bullish on Blockbuster Acquisitions
Wall Street Sees Upstream Stock Hitting Fresh Highs It’s time to put the income investing spotlight on MNR stock. The U.S. economy is facing headwinds with inflation on the rise, hiring at a standstill, and consumer sentiment near historic lows. At.
EIC Stock: 11.65%-Yielding Rare Income Play Hiding in Plain Sight
A Solid Dividend with a Chance of Upside? In today’s market, steady, high-yield income is getting harder to find. Bond yields have been all over the place, dividend growth at blue-chip companies has slowed to a crawl, and inflation has.
12%-Yielding MV Oil Trust Stock Up 42% Since March
Outlook for MV Oil Trust Remains Robust Today, I’m taking another look at MV Oil Trust (NYSE:MVO). Oil prices are down, but they remain volatile, with news coming out virtually every week that sees prices either spike or drop. In.
Western Union Stock: An Overlooked 11% Dividend Play with Contrarian Upside
WU Stock Offering Great Opportunity to Income Investors? Sometimes it’s important for investors to look beyond the headlines and what’s hot on the stock market. In fact, the best opportunities are almost never in the headlines. But when they are,.
