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.
Where I’m Finding 7%+ Yields Each month, I receive a rent check for a couple hundred bucks. I’ve collected these payments for years. And each month, they get a little bigger. In fact, these rent checks have become quite the.
GM Stock Dividend Forecast Due to the cyclical nature of the business, automakers aren’t known as the most solid dividend payers. But since General Motors Company’s (NYSE:GM) restructuring, the company has made a strong comeback and has started returning cash.
If You Want to Earn a Double-Digit Yield, Read This Today’s chart highlights one of the highest-yielding stocks in the current market, Summit Midstream Partners LP (NYSE:SMLP). Headquartered in The Woodlands, Texas, Summit Midstream Partners is a master limited partnership.
Consider This High-Yield Stock In my opinion, dividend growth is the number-one reason why income investors should consider stocks. This is because most bonds don’t offer regular increases in their coupon payments. But, with the right stocks, investors can earn.
Investing in companies with durable competitive advantages can pay big dividends, with Visa Inc (NYSE:V) stock being the latest example. On Thursday, February 1, after the closing bell, Visa Inc announced that its Board of Directors has approved a 7.7%.
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TMO Stock Returning Cash to Shareholders At Income Investors, we like stocks that offer substantial yields. But that doesn’t mean you should ignore low yield stocks altogether, especially when one just announced a double-digit dividend increase. On Wednesday, January 31,.
Another Dividend Hike from CVX Stock Chevron Corporation (NYSE:CVX) stock had quite a choppy ride in recent years, but the company’s dividends have been going in only one direction—up. On Wednesday, January 31, after the closing bell, Chevron Corporation announced.