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.
Collect a 24.5% Yield Starting February 8
This Royalty Trust Yields 24.5% Today’s post highlights one of the last places left to find double-digit yields: oil well royalties. You may have noticed prices starting to pick up at the pump. While that might be bad news for.
BKEP Stock: A Reliable 10.9% Dividend Yield You Likely Haven’t Considered
This Energy Stock Could Be a Long-Term Winner One of the strategies that yield-seeking investors might want to consider is looking into the out-of-favor sectors of the stock market. Because stocks in these sectors haven’t really shot through the roof,.
Gladstone Capital Corporation Declares Distribution, Now Yields 9.1%
Gladstone Capital Corporation Yields 9.1% Today’s chart highlights our favorite place to find high yields: business development corporations (BDCs). What BDCs do is provide money to very small businesses and receive interest in return. And thanks to a number of.
Procter & Gamble Co Declares Cash Payment to Shareholders
P&G Declares Quarterly Dividend Today’s chart shows “selling the basics” still works at Procter & Gamble Co (NYSE:PG). Regular readers know we love “boring” businesses, like soda, soap, and beer. These firms don’t get a lot of airtime on T.V.,.
PBFX Stock: The Safest 9% Yield on the Market?
A High-Yield Stock That’s Actually Worth Considering In a market where most companies pay less than five percent, a high dividend yield is often associated with high risk. So when you come across a stock with a nine percent annual.
BCE Stock: This 4.7% Yielder Hasn’t Missed a Dividend Payment Since 1881
The Most Reliable Dividend in the Market? Today’s article highlights one of the most solid dividend-payers in the current stock market, BCE Inc. (NYSE:BCE). If you are from the U.S., chances are BCE Inc. is not a familiar name. But.
MRCC Stock: A 9.8% Yielder That Could Benefit from Rising Interest Rates
Consider This High-Yield Stock If you own a portfolio of high-yield stocks, there’s one thing you should definitely pay attention to—rising interest rates. Due to the last financial crisis and the ensuing economic recession, the U.S. Federal Reserve kept the.
A Secure and Growing 8.2% Yield in Energy
This 8.2% Yield Really is Safe Today, we look at an industry that cranks out some of the highest yields around: pipelines. Longtime readers know America’s booming oil output has driven big gains for these partnerships. With more crude flowing.
AMZA Stock: Lock in a 24.3% Yield for 2018?
High-Yield Investment You Likely Haven’t Considered When it comes to earning a high dividend yield from the U.S. stock market, things don’t get much better than this. I’m talking about InfraCap MLP ETF (NYSEARCA:AMZA), an exchange-traded fund (ETF) that invests.
DLR Stock: Combining Technology and Real Estate to Produce 12% Dividend Growth Every Year?
This Company is Well-Positioned for Another Dividend Increase The technology sector has produced some of the fastest-growing companies in today’s stock market. The real estate sector, on the other hand, is known for its ability to generate a steady stream.
