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.
The Dividend Stock Defying COVID-19
American Tower Corporation Still Thriving Despite Lockdown Wall Street has fretted this summer over a pandemic, widespread protests, and the upcoming presidential election. But you wouldn’t know it by reading through American Tower Corporation’s (NYSE:AMT) recent financial results. The partnership’s.
Why I’m Banking on Exxon Mobil Corporation’s 8.1% Dividend Yield
Can You Really Trust Exxon Mobil Corporation’s 8.1% Dividend? The COVID-19 pandemic has hammered many businesses. But some businesses have suffered worse than others. Case in point: Exxon Mobil Corporation (NYSE:XOM). Commodity prices plunged after government lockdowns ground economic activity.
This 8.6% Yielder Is Making a Turnaround
A High-Yield Opportunity? If you’ve been following this column, you’d know that I like to check out the beaten-down stocks because some of them offer the biggest yields on the market. Moreover, if a down-and-out high-yield company manages to make.
Verizon Communications Inc.: Safe, Growing Yield of 4.3%
Verizon Stock Deserves Income Investors’ Attention At first glance, Verizon Communications Inc.’s (NYSE:VZ) 4.3% annual dividend yield may not seem like much. But when you consider how solid the business is and how much other companies are paying, you’d see.
3 High-Yield Dividend Stocks Paying Up to 12%
These High-Yield Dividend Stocks Still Have Respectable Payouts The stock market has soared lately, but you probably knew that already. Why it has soared is important. And while you can point to dozens of explanations, a big one is a.
AllianceBernstein Holding LP: Can You Count on This 11.7% Yield?
This High-Yield Stock Looks Interesting Smaller stocks can sometimes provide bigger yields, with AllianceBernstein Holding LP (NYSE:AB) serving as the latest example. AllianceBernstein is an investment management firm headquartered in New York City. Compared to the big-name asset managers like.
NextEra Energy Inc: A Top Dividend Stock for 2020 and Beyond
Income Investors: Here’s Why NextEra Energy Inc Needs to Be on Your Watchlist It’s another quarter on the books. And it’s another round of record profits from NextEra Energy Inc (NYSE:NEE). Longtime readers know I only cover top dividend stocks.
Coca-Cola Co: A Dividend Stock for the Next 100 Years
KO Stock Remains a Top Pick for Income Investors In an era when short-term profits seem to be all the rage, long-term investors may feel a bit lost. Think about it: companies often have to focus on getting good results.
Earn a 7.3% Yield (Paid Monthly) From the Healthcare Sector?
This High-Yield Stock Could Be Special With the COVID-19 pandemic sending shock waves across the economy and the financial markets, healthcare stocks are getting a lot of attention. Not only is the sector known for being more recession-proof than most.
These “Alternative Banks” Pay Between 15% and 24%
These High-Yield Stocks Keep Beating the Market From speaking with many of my readers, I know that virtually all of them want to earn more income from high-yield stocks. Interest rates have plunged to record lows. Blue-chip dividend stocks pay.
