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.
Crown Castle International Corp.: CCI Stock’s Dividend Could Double in 5 Years
Stock Offers Yield and Growth Some investors believe they have to choose between income and growth. But I say, why not have both? Take Crown Castle International Corp. (NYSE:CCI). The cell phone tower landlord yields just under four percent and.
TPVG Stock: The Best Tech Stock for Dividend Investors? (It Pays 11.2%)
Collect Oversized Dividends From Tech? If you’ve been following the markets, you’d have noticed the massive sell-off in U.S. equities a few months ago. During that downturn, technology stocks were hit particularly hard. In just the month of October, the.
Union Pacific Corporation: Billionaire Quietly Buying This Dividend Stock
Smart Money Investing Here John Armitage ranks as one of the top investors on Earth, though I doubt most people have ever heard of him. The billionaire investor founded Egerton Capital Limited in 1994. Today, it’s one of the largest.
Magellan Midstream Partners, L.P.: This Dividend Blue Chip Pays 6.6%
Are You Familiar with This Blue-Chip Stock? Today’s chart highlights one of my favorite blue-chip dividend plays, Magellan Midstream Partners, L.P. (NYSE:MMP). Now, you may be wondering: “Shouldn’t blue-chip companies be household names? Why haven’t I heard of this stock.
If You Are Bad at Poker, Try Dividend Investing
Poker vs. Investing I never had the makings of a professional poker player. Nevertheless, I tried very hard at becoming one. The first time I saw a poker tournament on TV, I was instantly hooked. I was not even old.
Investing in Real Estate: Collect Monthly Income (Without Becoming a Landlord)
One Stock to Retire On Investing in real estate can be lucrative. That is, if you don’t mind taking on a second job as a landlord. Would-be investors need solid credit and a sizeable down payment. From there, they have.
This Energy Stock Is a Yield Hunter’s Favorite (It Pays 10.7%)
A Rare Find in Today’s Market Hunting for yield can be frustrating at times. And it’s not because you can’t find generous companies; there are plenty of ultra-high yielders in today’s market. Go to any of the financial web portals,.
3 Monthly Dividend Stocks Yielding Up to 12.1%
These Stocks Pay You Monthly Do you know what I hate about bonds? They only pay you twice a year. For those of us who rely on our portfolio income to pay the bills, this can be a big headache..
Shell Midstream Partners LP: The 8.2% Dividend Yield That Keeps on Paying Out More
A Safe 8%-Plus Yield You should avoid most high-yield stocks. In fact, of the companies I follow with the 25 highest yields, only a handful maintain decent safety ratings. You just don’t often find companies with a big upfront payout.
Don’t Bail on This 17% Yielder Just Yet
1 Ultra-High Dividend Stock Can a company really afford to have a 17% dividend yield? If you believe that markets are efficient, the answer would be “no.” After all, when most dividend stocks struggle to pay six percent, a 17%.