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.
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
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12%-Yielding MV Oil Trust Stock Up 42% Since March
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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,.
Could 9%-Yielding USA Compression Partners Stock Jump 25%?
USA Compression Partners Reports Q2 Earnings Beat Why am I focusing on USA Compression Partners LP (NYSE:USAC) today? Well, depending on where we are in the economic cycle, energy stocks can provide investors with some pretty stellar gains. But when.
Could Bullish 18.5%-Yielding InPlay Oil Corp Stock Jump 73%?
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Delek Logistics Partners: Bullish 10%-Yielder Reports Record Q2 Results
Delek Logistics Bullish on Industry Tailwinds Today, I’m putting the income spotlight on Delek Logistics Partners LP (NYSE:DKL). Crude oil prices have traded in a fairly tight range of late on concerns about how a global trade war will affect.
DIN Stock: An Over-8.5%-Yielding Contrarian Play
DIN Stock’s Big Dividend Could Be Too Good to Ignore When everyone seems to be piling into the same trendy sectors, the best opportunities often lie in the corners of the market no one wants to touch. Rising interest rates,.
Spok Holdings Inc: High-Yielder Thumping S&P 500 on Strong Q2, Raises 2025 Guidance
SPOK Stock Hovering Near Record Levels Stocks are, admittedly, overvalued by a number of metrics, and economic data are indicating that the economy is stalling. Instead of running for the exits, investors simply need to make sure they’re seeking out.
