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.
DIN Stock: Heavy Institutional Ownership, Decent Earnings, & Robust Dividends
Could This Be the Last Call to Own DIN Stock? Usually, at Income Investors, we don’t look at companies that have a dividend yield of less than 8% to 10%. And Dine Brands Global Inc (NYSE:DIN) could be moving out.
Westlake Chemical Partners LP: 8%-Yielder Trading Near Record Levels
Could WLKP Units Have 20%+ Upside? Today’s income pick in the spotlight is Westlake Chemical Partners LP (NYSE:WLKP). One sector that often gets unjustly overlooked is basic materials. But, without this sector, you wouldn’t really have anything; it’s the beginning.
WHR Stock: Robust Dividend-Payer Selling for Pennies on the Dollar
A Rare Gem of a Contrarian Opportunity? Appliances aren’t really the hottest thing in town these days. Most investors aren’t waking up excited to buy a dishwasher or dryer. But sometimes, the most boring industries offer the most stable and.
Star Bulk Carriers: Get Paid Monthly From This 16%-Yielder
Could Star Bulk Stock Have 142% Upside Potential? When it comes to shipping, most investors probably think of midstream companies, or businesses that transport oil and gas. But there’s another subset of the marine shipping industry that can provide investors.
Ardagh Metal Packaging SA: Shares of 11%-Yielder Spike on Strong Q1
Outlook for AMBP Remains Robust In this economic environment, it’s a good idea to look beyond our borders. Global economies are evolving to form new trade relationships, so places like Europe, Canada, and Asia could provide solid growth opportunities. And.
FAT Brands Inc Stock: Rare 21%-Yielding Restaurant Play
Overlooked Stock Offering Great Opportunity? It’s very often the overlooked, unloved companies that quietly provide investors with the biggest windfalls. That’s why small-cap restaurant operator FAT Brands Inc (NASDAQ:FAT) could be worth a look. To be honest, FAT Brands Inc.
8%-Yielding USA Compression Partners Stock Trading Near Record Levels
USAC Stock Bullish on Industry Tailwinds There’s more to the energy sector than oil. Natural gas deserves your attention, too. Most investors tend not to pay much attention to natural gas, aside from BBQ season, of course. But, it’s the.
TFSL Stock: A Simple Business (with an Inflation-Crushing Dividend)
Why TFSL Stock Is Starting to Move Sometimes, the best opportunities can be found in companies that keep things simple. In a market that’s flooded with hype, high-growth stories, and businesses trying to do everything at once, it could actually.
Nordic American Tankers Ltd: 13%-Yielder Increases Quarterly Payout by 50%
Nordic American Announces 110th Consecutive Dividend An income pick that I think deserves the spotlight today is Nordic American Tankers Ltd (NYSE:NAT). While oil prices continue to take a hit on concerns about global economic growth, demand for oil and.
SFL Corporation: Could 13%-Yielding Stock Soar 100%?
SFL Corporation Adds Several Ships and $2.0 Billion in Backlog While economic uncertainty remains both here in the U.S. and globally, and probably will for the near future, the economies in China, Japan, and India are expected to perform better.
