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.
Mastercard Inc: MA Stock is One Growth Stock That Shouldn’t Be Ignored
Upside for MA Stock? The best income stocks to consider are dividend growth stocks. The expectation with these stocks is that when revenue increases, so does the payout to investors. Dividend growth stocks also support a higher share price, because.
Colgate Stock: This Company Has Paid a Dividend Since 1895
1 Dividend Stock to Own Forever Around our research office here at Income Investors, we just call them “forever assets.” Everyone knows exactly what we’re talking about. We bring them up so often, the shorthand just makes things easier. Forever.
EPR Stock: Earn a 5.52% Yield from This Monthly Dividend Stock
A Solid Monthly Dividend Stock for 2017 and Beyond Whether you are saving for retirement or just want to have an extra source of income, monthly dividend stocks can be a great help. Unlike most dividend-paying companies that distribute every.
BPY Stock: A Growing Dividend-Paying Stock Offering a 4.99% Yield
This Dividend-Paying Stock Sees an Annual Payout Increase The real estate sector has a long track record for generating wealth and a steady stream of income over the long term. That’s why investors want exposure to this segment of the.
JNJ Stock: Johnson & Johnson Still a Top Pick for Long-Term Investors
JNJ Stock Delivering Enormous Returns The thing with dividend stocks like Johnson & Johnson (NYSE: JNJ) is that they don’t really work that well in a conversation at a cocktail party. When asked about your stock market investments, people will.
Top 10 Mid-Cap ETFs for Long Term Growth
Best Mid-Cap ETFs Market-beating returns could be generated by investing in areas that other investors are passing by, via the best mid-cap exchange traded funds (ETF). That’s because owning securities that the majority of the market isn’t interested in means.
STB Stock: 1 Dividend Stock to Retire On
Retirees: This Stock Yields 7.2% You worked so hard. You busted your butt to build a nest egg. Then interest rates crashed and your income with it. Saving accounts yield next to nothing. Bank certificates of deposit pay just one.
A 12.1% Yield Backed By “Uncle Sam”
This Dividend Stock Yields 12.1% Today’s chart highlights my favorite place to find safe seven percent, nine percent, and even 12% yields: mortgage real estate investment trusts (REITs). Mortgage REITs work like a virtual bank. They borrow money from savers.
Top 3 Convertible Bond ETFs for 2017
What Are the Best Convertible Bond ETFs for 2017? The more choices for your portfolio there are, the better. One under-invested option is convertible bonds. These will give you the opportunity to receive a steady and reliable income source and.
SRC Stock: A Real Estate Company Paying a 9.59% Dividend Yield
SRC Stock Shouldn’t Be Ignored The low-interest-rate environment in the U.S. is keeping investors away from traditional income options such as savings accounts and money market products. However, looking at these investments, the risk/reward trade-off is not very appealing and.
