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.
Ford Stock: The No.1 Reason to Be Bullish on Ford Motor Company
Ford Stock is Another “Not As Bad As You Think” Opportunity Despite the company’s solid performance, Ford Motor Company (NYSE:F) stock hasn’t really been a hot commodity. Year-to-date, Ford stock has dropped nearly 10%. The thing is, Ford is a.
Gilead Sciences, Inc.: 3 Reasons to Be Bullish on GILD Stock
Upside for GILD Stock? Gilead Sciences, Inc. (NASDAQ:GILD) stock is a dividend growth stock that investors may wish to consider taking a look at. Gilead is a biopharmaceutical company that discovers, develops, and commercializes medicine. Gilead sells its products worldwide.
Earn 6.4% From STX Dividend-Paying Stock (NASDAQ:STX)
STX Stock Is One Dividend-Paying Stock That Should Not Be Ignored One of the most difficult sectors to find dividend-paying stocks in is the technology sector. That’s because technology stocks have quite large gross margins. Also, rather than paying shareholders.
Blueknight Energy: 1 High-Dividend Stock Yielding 8.8%
Can a High-Dividend Stock Be a Safe Bet? The past several years haven’t been that great for income investors. Because fixed-income products didn’t pay much, many investors turned to dividend stocks. The thing is, markets are mostly efficient. If there.
Donald Trump “Trigger Event” Could Be Huge for Cisco Stock
Donald Trump Could Be Big for CSCO Stock Donald Trump’s tax plan could alter the rules by which Cisco Systems, Inc. (NASDAQ:CSCO) plays, creating a potentially huge catalyst for CSCO stock. In an interview with CNBC on Wednesday, Cisco Chief.
AT&T Inc.: Donald Trump Presidency a Big Deal for AT&T (T) Stock?
This Could Be Huge for AT&T Stock Income investors are no stranger to AT&T Inc. (NYSE:T) stock. With a five-percent dividend yield, AT&T stock has played a crucial role in helping investors boost the yields of their dividend portfolios in.
Here’s Why Western Digital Corp Stock (WDC Stock) is Going Crazy Today
Western Digital Stock Surges 4.79% A four-decade-old company with a three-percent dividend yield doesn’t sound like one that makes big moves. But on Tuesday, December 6, Western Digital Corp (NASDAQ:WDC) stock surged 4.79% in after-hours trading. And that’s on top.
MA Stock: This is Why Mastercard Inc Stock is Up Today
Mastercard Stock Climbs in After-Hours Trading Mastercard Inc (NYSE:MA) stock might not be known as a staple for dividend investors, but over the years, the company has been consistently raising its payout. The latest dividend hike also managed to send.
Nike Inc: The Most Overlooked Reason to Own Nike (NKE) Stock
Nike Stock is a Top Dividend Pick “The king of the hill can only go down.” This has been the argument of many Nike Inc (NYSE:NKE) stock bears. The company is the top player in the U.S. athletic footwear market,.
This Is Why BMO Stock is Soaring Today
BMO Stock Soars On Strong Earnings The Bank of Montreal (NYSE:BMO) beat analysts’ earnings estimates and raised its dividend Tuesday, sending shares of BMO stock soaring. Canada’s fourth-largest bank posted core cash earnings per share (EPS) of CA$2.10 in the.
