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.
Qualcomm, Inc. Returning Cash to Investors Amid Market Turmoil
QCOM Is a Solid Dividend Stock In a period when every ticker seems to be deep in the doldrums, few things are better than a dividend increase from a blue-chip company. On March 10, Qualcomm, Inc. (NASDAQ:QCOM) announced that its.
Energy Transfer LP: Earn a 30% Yield From an Energy Stock?
ET Stock Offers a Jaw-Dropping Payout With the latest downturn in oil prices, energy stocks have been heavily sold off. As a result, their dividend yields have climbed. Of course, beaten-down high yielders aren’t really known for their dividend safety..
5 Top Dividend Stocks to Own in a Recession?
These Top Dividend Stocks Yield Up to 8% Officials have locked down San Francisco. Arnold Schwarzenegger remains in isolation with a mini-horse and a donkey. And crowds swarm over six-packs of toilet paper across the country. Imagine trying to explain.
Earn Monthly Dividends with a 9.6% Yield from the Healthcare Sector?
A High-Yield Investment Vehicle to Think About It’s no secret that the healthcare sector is one of the best places to earn passive income. The demand for healthcare stays relatively inelastic to how the overall economy is doing, and as.
EPR Properties: This Monthly Dividend Stock Now Yields 16%
EPR Stock Is Offering a Big Yield Unless you’ve been living under a rock, you’ve probably heard that stocks have been falling. The three major indices of the U.S. stock market have plunged over the past few weeks, and even.
Automatic Data Processing Is a Future Dividend King
ADP Stock Deserves Income Investors’ Attention In the world of dividend stocks, there is an elite group called the Dividend Kings. By definition, a Dividend King is a company that has raised its dividend every year for at least 50.
FS KKR Capital Corp: “Alternative Bank” Paying Investors 15%?
Another High-Yield Stock to Think About With an unexpected 50-basis-point interest rate cut from the U.S. Federal Reserve, it’s safe to say that, in the near future, Americans won’t be getting much return from their savings accounts. And that’s why.
Alamos Gold Inc: 50% Dividend Increase… From a Gold Mining Company?
Alamos Is Returning Cash to Investors For the most part, income investors aren’t really known for being fond of gold. The reason is simple: on its own, the yellow metal does not pay any interest or dividend. However, gold mining.
3 “Forever Assets” Yielding Up to 7.9%
Three Top Dividend Stocks to Consider After the Crash Stocks have plunged, but you probably don’t need a reminder. Why they’ve plunged matters. And while you can point to many reasons for the panic (not all of them rational), a.
Macerich Co: Contrarian Income Play Now Yields 18.3%
This High-Yield Stock Looks Interesting Income investors and contrarian investors don’t cross paths very often. One group looks for steady income while the other group deliberately goes against a prevailing market trend and needs the trend to reverse in order.
