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.
VZ Stock: A Great Dividend Play with Sound Growth Plans In this ongoing market rally, it’s tough to find entry points to buy some great stocks which reward their investors with higher dividend payouts quarter after quarter. I think a.
GM Stock: Auto Sales Trend Still Encouraging There has been a lot of uncertainty surrounding companies producing cars these days. Some analysts expect the U.S. demand for cars peaked last year, and going forward it will be a rough ride.
Microsoft Stock Dividend Quadrupled Over the Past 10 Years In today’s market, tech stocks aren’t known for their dividends; rather, they are known for making sizable moves in short time frames. But when there is something as solid as Microsoft.
Investors that are seeking steady income need to reconsider General Electric Company (NYSE:GE) stock. This old-school blue-chip company is still a very reliable income generator. General Electric stock has paid a cash dividend every quarter since June 2004. GE stock’s.
Strong Fundamentals for ABT Stock Abbott Laboratories (NYSE:ABT) stock is a blue chip stock that dividend investors should add to their watch lists. Abbott’s business is split into four categories—nutrition, diagnostics, medical devices, and pharmaceuticals—which gives the company diversification. Abbott’s.
HPQ Stock: Personal Computers Business In 2015, Hewlett-Packard split into two companies, with HP Inc (NYSE:HPQ) stock keeping the lower-margin legacy businesses, personal computers, and printers. However, “lower margin” is not to be confused with “unprofitable,” as the company had.
Most investors buy diversified dividend growth stocks so they can reinvest those dividends and hopefully live off the income stream generated by those dividends in retirement. Dividend investing has become even more important over the last few years in light.
Intel Stock Could Be a Bet for the Future Income investors like Intel Corporation (NASDAQ:INTC) stock because of its steadily increasing dividends. And indeed, despite being a 48-year-old legacy tech company, Intel is still growing its payout. In the past.
Collect Monthly Income From Realty Income Corp? Today, I want to share my favorite way to invest in real estate: Realty Income Corp (NYSE:O). Most folks don’t even know this firm exists. The company, though, has been paying investors monthly.
525% Distribution Increase Since IPO With oil prices still deep in the doldrums, energy stocks are having a hard time finding an audience despite their impressive dividend yields. And indeed, if oil prices don’t recover, drillers will likely continue to.