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.
Philip Morris Stock Trading at Record Highs; Still Pays 4.9% Dividend A perfect storm has made it possibly the perfect time for investors to embrace sin stocks. Interest rates are still near record lows and stocks are near record highs..
WPC Stock May Be the Best REIT Stock Out There For income investors, it’s all about the dividends. That means finding a company that not only has a strong enough balance sheet to provide stable dividends, but a company that.
A High-Yield Financial Stock to Think About There’s little doubt that technology has been one of the hottest sectors in the market. And yield-seeking income investors want a piece of the action, too. But there are two problems. First, many.
A Dividend Stock Worth Owning Forever? Income investors are no stranger to Johnson & Johnson (NYSE:JNJ). As one of the biggest health-care companies in the world, JNJ stock has delivered enormous returns to shareholders over the years. But with everyone.
This High-Yield Stock Could Be Special In today’s market, there are plenty of high-yield energy stocks to choose from. One of the reasons is that investors are aware of the risks associated with the energy sector, especially after seeing what.
USAC Stock Maintains $0.525 Quarterly Payout The energy sector is cyclical in nature, which means there can be stretches of volatility. That’s because its performance is based on where we are in the economic cycle, and even the weather. After.
Presidio Property Trust Inc Does Well Despite COVID-19 Presidio Property Trust Inc (NASDAQ:SQFT) isn’t so much an overlooked stock as one that only began trading on the Nasdaq last October. To be fair, it probably wasn’t the best time for.
ET Stock Bullish on Improved Financials & New Developments Many energy stocks took a beating during the coronavirus pandemic in 2020. While many of those stocks have moved considerably higher since the broader stock market bottomed in March 2020, some.
This Dividend Stock Looks Interesting There are many ways to invest in the health-care sector, such as buying shares of drug manufacturers, medical equipment makers, and managed health-care companies. For income investors, though, there are health-care plays that are often.
A High-Yield Real Estate Stock to Think About In today’s low-yield environment, I doubt anyone would complain about earning an annual dividend yield of nine percent. But Ares Commercial Real Estate Corp (NYSE:ACRE) is willing to dish out even more..