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.
PG Stock: 61 Years of Dividend Increases and Continuing
The Perfect “Set-and-Forget” Stock? In a market where high-momentum stocks are making double-digit moves every other day, dividend increase announcements can easily get ignored. Indeed, thanks to the U.S. Federal Reserve’s decision to keep interest rates at artificially low levels.
Consider BEP Stock (NYSE:BEP) for its Growing Yield
BEP Stock: A Dividend-Paying Stock Worth Noticing With any dividend-paying stock, the most important thing is the payout and how future payments could be impacted. As such, the clear goal is to buy into a company that is able to.
HSBC Stock: This Overlooked Bank Stock Now Pays 5.33%
Why HSBC Stock Deserves the Attention of Income Investors Investors have been in a love-hate relationship with bank stocks. On one hand, banks can be some of the most solid businesses. A well-run financial institution can generate steadily increasing returns.
Earn a 9.4% Yield From “Made in America” Oil Export
Obama’s Secret Gift for Investors New laws have altered the rules by which the oil industry plays, creating a huge income opportunity for savvy investors. Since 1975, the government virtually banned the export of American oil. That changed in late-2015,.
GAIN Stock: Top Monthly Dividend Stock with an 8.1% Annual Yield
Boost Your Portfolio Return with This Top Monthly Dividend Stock One of the biggest misconceptions about income investing is that you need to have a lot of money to start with. At first glance, it seems that a hefty initial.
Bank of America Corp: Consider BAC Stock for the Growing Margins and Dividends
Can BAC Stock Continue to Reward Shareholders? Bank Of America Corp (NYSE:BAC) stock is up 225% over the past five years. But are the good times behind it, or is there more possible upside ahead? Bank of America is one.
Southern Co. Shouldn‘t Be Ignored for Its Steady and Growing Dividend
Southern Co Rewards Shareholders with a Growing Dividend Payout Southern Co (NYSE:SO) is an electric and gas utility holding company, distributing electricity to homes and businesses in seven states across the U.S. It currently offers an impressively high quarterly dividend.
A High Dividend Stock: LMRK Stock Which Has Seen 10 Straight Dividend Hikes
LMRK Stock Is Offering a 8.03% High Dividend Yield Change is so constant these days that it is difficult to look at investment with a long-term view and find a great high-dividend-paying stock. Take the retail industry: 20 years ago,.
EVA Stock: A 7.8% Yielder That Raises Its Payout Every Quarter
1 High-Yield Stock for 2017 and Beyond The definition of a high-yield stock varies depending on who you talk to. For instance, some say it needs to have a higher yield than the average of the S&P 500 Index. But.
PAC Stock: Up 57% in Seven Months, with Plenty of Upside Left
Up 57% in Mexico: What to Do Next I crushed it on Mexico! Last year, analysts worried a Trump Presidency would spark a trade war. Investors unloaded their positions, dumping high-quality assets at any price. We told readers to forget.
