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.
High-Yield Dividend Stocks Here If you’re searching for high-yield dividend stocks, Canada nears the top of the list. Resource shares, which make up most of that country’s stock index, have fallen out of favor. And with a left-wing government in.
Home Depot Stock Set to Return More Cash to Investors In a soaring stock market, a few percents of dividends may not seem like much. But if you own shares of solid dividend growers like Home Depot Inc (NYSE:HD), continuous.
New Project Pays Yield Earlier this month, Exxon Mobil Corporation (NYSE:XOM) green-lit one of the country’s largest natural gas export facilities. The move is the latest development in America’s energy boom, a trend I’ve been tracking for over five years.
A Top Dividend Stock From an Unlikely Industry Income investors are not fans of uncertainty, which is part of the reason they don’t look at biotech stocks that often. With some biotech companies, their stock’s appeal depends critically on the.
Spotting Top Dividend Stocks My job description is pretty simple: identify the world’s best dividend stocks for thousands of Lombardi Publishing readers. I’ve studied thousands of income investments, from master limited partnerships to real estate investment trusts. I’ve even written.
If You Want to Earn “Bonus Checks” From Stocks in 2019, Read This What could be better than a safe dividend yield of 9.4%? Answer: a safe 9.4% yielder that grows its payout. Is there anything that could be even.
If You Want to Earn Bulletproof Dividends, Read This Last week, I introduced readers to a concept called “bulletproof dividend stocks.” They are not the hottest tickers in the stock market. But if you own them long enough, you can.
New Income Opportunity If you drive to the outskirts of San Jose, you will find a special tollbooth in front of the city’s landfill. Thousands of trucks pass through this gate each day. And every time a truck passes by,.
Warren Buffett’s New Income Stream Pays a Big Yield It’s one of my top dividend stocks in the Canadian oil patch. And apparently, legendary investor Warren Buffett agrees with me. The company is Suncor Energy Inc. (NYSE:SU). A pioneer in.
A Top Pick for Dividend Growth Investors One of the reasons why we like dividend growth stocks is that by owning them, we can earn a higher yield on cost as time goes by. For instance, a stock may have.