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.
A Little-Known Stock With a Big Payout At first glance, Slate Grocery REIT (TSE:SGR.UN, OTCMKTS:SRRTF) seems like just another foreign stock. The company is listed north of the border on the Toronto Stock Exchange and it trades in the U.S..
A High-Yield Stock Most People Likely Haven’t Considered If you think the bloated stock market means investors have to settle for low-yield stocks, think again. Even though dividend yields, in general, have gone down over the years as stocks have.
Antero Midstream Stock: Inflation-Trumping Stock Remains Bullish Rising treasury yields sent Wall Street into a tizzy in late February, with tech stocks cratering. Since then, saner minds have prevailed, the markets have settled, and the 10-year Treasury yield is holding.
Looking for Monthly Dividends? Read This In today’s stock market, companies that pay dividends usually follow quarterly distribution schedules. That is, investors have to wait three months between dividend checks. But there’s also a group of companies that pay cash.
Main Street Capital Stock: High Dividend & Stock Growth Main Street Capital Corporation (NYSE:MAIN) is an excellent, overlooked stock that provides investors with long-term growth no matter how you look at it. MAIN stock provides a frothy, monthly dividend with.
A Top Dividend Stock Most People Likely Haven’t Considered In these uncertain times, blue-chip stocks are getting more attention. But here’s the catch: blue-chip companies have already been highly sought over the past decade. As a result, most of them.
ARCC Stock Is a High-Yield Stock You Likely Haven’t Considered The low-yield economic environment hasn’t been that great for income investors. And it’s not because there aren’t any high-yield stocks on the market right now—use a stock screener and you’ll.
National Health Investors Stock Dividend Rises 5% During Pandemic The outbreak of COVID-19 wreaked havoc on the global economy and sent the stock market crashing. While the coronavirus pandemic has impacted every corner of the population, some have been hit.
Preferred Apartment Communities Inc. Set to Reward Investors in 2021 When it comes to real estate investment trusts (REITs), the ones that own apartment buildings provide some of the most reliable, high-yield dividends. During a typical economic downturn, most people.
Looking for Reliable Dividends? Read This If you’re looking for reliable dividends, few sectors are worth checking out more than utilities. Known for its durable, recurring business model, the utilities sector has produced plenty of safe and rising income plays.