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.
This Strategy Beats the Market Most people think you need a complex strategy to beat the market. They think earning outsized returns requires some fancy model. A deep dive into statistics most people can’t follow. They’re wrong. Today, I’ll show.
Top Dividend Stock for 2018 and Beyond When it comes to consumer goods, people are willing to pay a premium for established brand names. And that’s one of the reasons why Procter & Gamble Co (NYSE:PG) has been making oversized.
Top Monthly Dividend Stock to Consider It’s no secret that the e-commerce industry has been firing on all cylinders. When consumers can buy nearly everything—including fresh groceries—with the click of a button, many online vendors are making money hand over.
A High-Dividend Stock You Likely Haven’t Considered Today’s chart highlights a rare find in the current stock market: a double-digit yielder that actually grows its payout. I’m talking about Landmark Infrastructure Partners LP Unit (NASDAQ:LMRK), a master limited partnership (MLP).
These Stocks Yield Up to 7% When everyone is lining up to buy the same investment, it’s a good idea to look elsewhere. It’s a good idea to make the “tough investment.” A tough investment goes against the consensus. It’s.
This Stock Yields 15.9% Today’s post highlights my favorite place to find big yields, “cash cows.” As longtime readers know, cash cows represent mature businesses that churn out lots of cash flow. Think of industries like cigarettes, dish soap, or.
Should Income Investors Consider This High-Yield Stock? In today’s market, most double-digit yielders are not perfect. Quite often, a company can offer an ultra-high yield only because of the downturn in its share price. And that was pretty much the.
Collect Oversized Profit From a Beaten-Down Industry Today’s chart highlights one of my favorite turnaround stories in the current stock market: Macy’s Inc (NYSE:M). As a consumer, you’ll likely have visited a Macy’s store at least once. With over 800.
Lessons From Great Investors Did you catch this story? In May, The New York Times published a profile on an unassuming woman named Sylvia Bloom. The 96-year-old, who passed away in 2016, had spent 67 years working as a legal.
A High-Yield Stock That’s Actually Worth Considering Even in today’s bloated stock market, finding high-yield stocks is easy. Just go to any of the financial web sites, set dividend yield as the screener, and you’ll see dozens of stocks with.