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.
General Mills, Inc. (NYSE:GIS), a U.S.-based food company, provides the perfect opportunity to go long in a market that’s in a constant state of flux. As you know, in a volatile global economy, stocks that are less sensitive to economic.
Las Vegas Sands Corp. (NYSE:LVS) owns and operates integrated resorts in Macao, Singapore, Las Vegas, and Bethlehem, Pennsylvania. An integrated resort combines retail, entertainment, gaming, hotel, convention, and dining facilities all on one property. Las Vegas Sands is an industry.
This Could Be Big for DIS Stock Walt Disney Co (NYSE:DIS) stock deserves the attention of income investors because of the company’s potential to ramp up its dividends from the current yield of 1.55%. Most recently though, despite the company’s.
Viacom Stock: Merger News Creating Excitement The bad days for investors in Viacom, Inc. (NASDAQ:VIAB) stock are probably over. After declining 16% this year, the fortunes for this media conglomerate may turn for good after investors in VIAB stock las.
PEP Stock: Positive Surprises Fueling More Gains PepsiCo, Inc. (NYSE:PEP) stock surged more than two percent in early trading today after it surprised investors with higher-than-expected earnings and boosted its full-year profit forecast. Is this enough to fuel more gains.
F Stock: F for Future-Proof? I talk about recession-proof stocks a lot in my columns. I mean, if you are building an income portfolio, the stocks better be something that can handle both good times and bad times. Unfortunately, Ford.
WFC Stock: Can We Really Trust Wells Fargo & Co? Wells Fargo & Co (NYSE:WFC) stock is in hot water… and this could be just the beginning. Earlier this month, regulators revealed Wells Fargo created millions of unauthorized bank and.
AXP Stock: Share Buyback, Dividend Hike Brighten Outlook It’s very tough to come up with a good financial stock to recommend these days, when the economic environment isn’t great and a lot of things which banks do aren’t producing great.
McDonald’s Corporation (NYSE:MCD) stock rose one percent in pre-market trading Thursday after the company announced a 5.6% dividend increase. Going forward, McDonald’s will pay an annualized dividend of $3.76 per share. Based on its September 28 closing price of $115.18.
Is Wal-Mart Stock’s Dividend Safe? Investors are aware that retailers like Wal-Mart Stores, Inc. (NYSE:WMT) are under the threat of the booming e-commerce industry. But Wal-Mart stock has been resilient; year-to-date, it returned a decent 17%. Most recently, though, there.