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.
New York, NY — Hardwood lumber distribution doesn’t sound like an exciting business, but a sizable dividend hike from this company should get some attention from income investors. On Monday, July 18, Hardwoods Distribution Inc (TSE:HWD) announced that it has.
New York, NY — For the 12th year in a row, Ryder System Inc. (NYSE:R) has elected to slightly raise its dividend. The company declared a payout of $0.44 per share, to be paid on September 16 to stockholders of.
College housing can be fun, even for your retirement. Of course, I’m talking about investing in real estate investment trusts (REITs) that own collegiate housing. On Friday, Education Realty Trust, Inc.’s (NYSE:EDR) board of directors approved a quarterly dividend of.
New York, NY — For the 27th year in a row, National Retail Properties, Inc. (NYSE:NNN) has elected to slightly raise its dividend. On Friday, the real estate company’s board of directors declared a quarterly dividend of $0.455 per share,.
Credit card debt can be a burden, but owning a credit card company’s stock can be quite rewarding. On Thursday, Discover Financial Services’ (NYSE:DFS) board of directors approved a quarterly dividend of $0.30 per share. This represents a seven percent.
In a world where 10-year treasury notes are yielding a measly 1.6%, income investors have to shop outside of the fixed-income department. Where will you find good picks for your income portfolio? Well, this real estate investment trust (REIT) with.
New York, NY — For the fourth consecutive quarter, Bassett Furniture Industries Inc. (NASDAQ:BSET) has elected to raise its dividend to shareholders. On Thursday, the home furnishings manufacturer declared a payout of $0.10 per share, to be paid on August.
New York, NY — For the sixth consecutive quarter, Antero Midstream Partners LP (NYSE:AM) has elected to slightly raise its distribution. On Thursday, the partnership declared a payout of $0.25 per unit, to be paid on August 24 to stockholders.
Business is volatile in the oil patch, but one energy producer is pumping out consistent returns for shareholders. On Thursday, Occidental Petroleum Corporation (NYSE:OXY) announced that its board of directors has authorized an increase in the company’s dividend from an.
Low interest rates have made it difficult for financial institutions, but one bank is finding ways to reward shareholders. On Wednesday, Lakeland Financial Corporation (NASDAQ:LKFN), the parent company of Lake City Bank, announced that its board of directors approved a.