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.
MVC Capital, Inc.: Bargain Hunters Should Check Out This 10.4% Yielder
One High-Yield Stock to Think About In the stock market, there are two things that can sometimes go together: value and yield. You see, at any given annual cash payout, a company’s dividend yield moves inversely to its share price..
Is Enbridge Inc’s 7.4% Yield Safe?
Can You Really Trust This High-Dividend Stock? Maybe. Most high-dividend stocks don’t come with safe payouts. In fact, with most of the high-dividend stocks that cross my desk, I toss them in the proverbial wastebasket. Nowadays, it’s rare to find.
National Retail Properties, Inc.: Small Dividend Hike Could Mean a Lot
Could This Be a Turnaround? If you’ve been following real estate investment trusts (REITs), National Retail Properties, Inc. (NYSE:NNN) should sound familiar. It is one of the bigger players in the business, and it has dished out some generous dividends.
PepsiCo, Inc. Is a Top Dividend Stock for 2020 & Beyond
PEP Stock Stands Out Earnings season has kicked off, and frankly, it could be a scary one. The COVID-19-related business shutdowns started in late March, so the economic impact of the pandemic on the second quarter of 2020 was likely.
5 High-Dividend ETFs Paying Up to 13.5%
The Best High-Dividend ETFs for August 2020 I know from speaking with hundreds of individual investors that most all of them are worried about low yields. In a bid to prop up the economy, the Federal Reserve has slashed interest.
COVID-19 Gives Kroger Stock a Boost
Wall Street Starting to Give Kroger Stock a Rethink While the COVID-19 pandemic has forced dozens of blue-chip dividend stocks to suspend their payouts, one company has managed to thrive: Kroger Co (NYSE:KR). After posting blowout financial results, the grocer’s.
Insiders Loaded Up on This 19% Yielder, Should You Too?
ET Stock Offers a Jaw-Dropping Payout When most companies are paying less than five percent in dividends, it can be hard to wrap one’s head around a yield that’s close to 20%. But it is happening. Energy Transfer LP (NYSE:ET),.
Walgreens Boots Alliance Inc: An Overlooked Dividend Opportunity
WBA Stock Returning Cash to Investors The healthcare sector is known for being durable. But that doesn’t mean companies from the sector won’t see downswings in their share prices. Walgreens Boots Alliance Inc (NASDAQ:WBA), for instance, is one of the.
3 High-Dividend Stocks Poised to Hike Their Payouts in August
These High-Dividend Stocks Pay Up to 8.7% When 2020 started, did you expect a global pandemic, double-digit unemployment, mass protests nationwide, the worst economy since the Great Depression, empty office towers, and a ban on hugging? Of course not. And.
TriplePoint Venture Growth BDC Corp: This 14.6% Yield Could Be Special
This High-Yield Stock Deserves a Look Even in today’s low-yield environment, there are still plenty of companies with oversized payouts. Using a stock screener, you’ll easily find companies offering yields north of 10%. But investors are not really going after.
