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.
Monroe Capital Stock: Bullish 13.8%-Yielder Has 22% Upside Potential
Why MRCC Stock Is Worth Watching Since July 2023, the U.S. Federal Reserve has held its interest rates at 5.25% to 5.5%, their highest level since 2001. There’s some relief coming, with interest rates expected to start going down this.
Bullish 13.4%-Yield Ellington Credit Stock Pays Monthly
Why EARN Stock Has Been Rising Ellington Credit Co (NYSE:EARN) is a financial services company that has, like its peers, seen its share price steadily trend higher since the beginning of November 2023. That’s when the Federal Reserve said it.
Dorian LPG Stock: Bullish 8.9%-Yielder Reports Record-High Net Income
LPG Stock Trading at Record-High Levels Dorian LPG Ltd (NYSE:LPG) is a great midstream energy stock I’ve been following closely for the last couple of years. And for good reason. Strong industry tailwinds have seen it go from strength to.
Enterprise Products Stock Is a 7.5%-Yield Dividend Aristocrat
EPD Stock a Great Widow Stock for Long-Term Income Investors The dividend aristocrat club is exclusive; only the top dividend stocks are included. The two criteria for membership are raising dividends for at least 25 consecutive years and being part.
Broadstone Net Lease Stock a Diversified REIT Yielding 7.4%
BNL Stock Is a Good Ol’ Brick & Mortar Play Real estate investment trusts (REITs) should form part of an income investor’s diversified investment portfolio. That’s because the mandate of REITs is to provide income to investors. The majority of.
Crown Castle Stock: Telecom Infrastructure REIT Yields 6.2%
Contrarian Income Investors: Take Note of CCI Stock The U.S. is in the process of rapidly building up its advanced communications infrastructure, especially since there’s high demand for 5G technology. Cell towers and the associated infrastructure are expensive to construct,.
5.8%-Yield WP Carey Stock on 27-Year Dividend Streak
Why WPC Stock Is Attractive Right Now Income investors continue to reap the rewards from high-yield treasury bonds, but the reality is that interest rates are heading lower, and that will result in lower bond yields. Investors who seek a.
Altria Stock a Value 8.6%-Yielder With a Long Dividend Streak
MO Stock Has Paid Dividends for 50+ Straight Years The majority of large-cap blue-chip stocks generally yield less than five percent. But there are exceptions, and this is usually because a company’s share price is down due to operational issues..
6.1%-Yield Antero Midstream Stock Up 16.4% This Year
AM Stock Offers Best of Both Worlds: Income & Share-Price Appreciation In the current high-interest-rate environment, investors have been purchasing high-yield treasury bonds as an alternative to dividend stocks because of their lower risk. Treasury bond yields continue to be.
Delek Logistics Stock: Dividend Grower Yielding 10.9%
Steady Dividends & Compelling Risk/Reward Trade-off With DKL Stock Small-cap stocks have been lagging the broader market, but that doesn’t mean they aren’t worth a look. In reality, smaller companies tend to be more flexible in their strategies. Finding small-cap,.
