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.
DDR Corp: Check Out This 9.4% Yielder in the Bargain Bin
This Ultra-High Dividend Yield is Actually Worth Considering If you are chasing the hottest tickers, chances are you won’t find many high-yield stocks. The reason is simple: a company’s dividend yield moves inversely to its price. As share prices rise,.
This Ignored Dividend Stock Has Increased Payments 986%
1 Dividend Stock to Own Forever As I’ve said over and over, one of the good things about dividend stocks is that they’re predictable. Take Automatic Data Processing (NASDAQ:ADP), for example. In a column last month, my colleague Jing Pan .
Getting a Quarterly Raise…in Retirement?
The Best Retirement Income Solution? In the workplace, you’d be considered lucky if you are getting annual pay raises. But once you retire, the payroll checks would stop coming in. And that’s why today’s top pick is special. This investment.
WMT Stock: Time to Bail on This Dividend Aristocrat?
Here’s Why You Shouldn’t Give Up on Wal-Mart Stores Inc There’s no denying that the e-commerce industry is firing on all cylinders. According to market research firm eMarketer, worldwide retail e-commerce sales is on track to grow 23.2% this year.
Earn 7.4% Income for Life
Little-Known Income Stream Yields 7% Before we get into this piece, I have to tell you: this might be one of the most boring niches in the market. You probably won’t be bragging about this investment around the office water.
The Most Overlooked Aspect of Dividend Investing
The Secret to Ever-Increasing Dividends? Earlier this year, I wrote a piece on why it’s important for income investors to focus on companies that can generate a recurring business. It’s one of the most important things to check when shopping.
8Point3 Energy Partners LP: Blue Skies for This 7.2% Yield
8Point3 Energy Partners LP Yields 7.2% I avoid most high-yield stocks. In fact, of the companies we follow at Income Investors with the highest yields, most have junk ratings. In other words, oversized payouts usually result in oversized losses. But.
Martin Midstream Partners L.P.: This Little-Known Stock Pays Big Dividends with a 13.27% Yield
Yield-Seeking Investors Should Consider This Midstream Partnership Most people have never heard of Martin Midstream Partners L.P. (NASDAQ:MMLP), but it offers one of the highest yields in the U.S. stock market. Headquartered in Kilgore, Texas, Martin Midstream Partners is a.
Medical Properties Trust Inc.: Can You Count On This 7.1% Yield?
Medical Properties Trust Inc. Yields 7.1% Over the next few decades, few businesses will mint more money than healthcare. Each year, more than 3.7-million baby boomers turn 65. That means more tests, more prescriptions, and more doctor visits. Medical Properties.
MCC Stock: This 11.3% Yielder Trades at a Significant Discount
Earn a Double-Digit Yield from MCC Stock There’s no other way to put it: the U.S. stock market is bloated. Over the past 12 months, all three major indices have soared past their all-time highs. Consider this: the S&P 500.
