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.
Retirement Income: 5 Monthly Dividend Stocks Paying up to 18.2%
Monthly Dividend Stocks for Reliable Retirement Income Investors searching for retirement income often face one big problem: infrequent distributions. Bonds pay coupons semi-annually. Dividend stocks do slightly better, as most send out distributions on a quarterly basis. Younger investors usually.
Walmart Inc. Has Soared 32% in the Past Year, with More Upside Ahead
Blue-Chip Walmart Inc. Delivers Startup-Like Returns Who says big blue-chip stocks can’t grow as fast as small startups? Walmart Inc (NYSE:WMT) shares have soared 32% in the last year as the world’s largest retailer has reignited existing store sales growth..
Verizon Communications Inc.: Get Ready for a Dividend Hike
Looking for Growing Dividends? Read This In a soaring stock market, a few percent of dividend yield may not seem like much. But given the uncertainty surrounding the world economy right now, solid dividend growth stocks could provide a way.
3 Retirement Investments Yielding Up to 7%
These Retirement Investments Provide Regular Income Retirees, or those soon to leave the workforce, face a big challenge: replacing their paycheck with income from their retirement investments. Social Security won’t cut it. And few of us are fortunate enough to.
Hoegh LNG Partners LP: This High-Yield Stock Pays a Safe 10.1%
Can You Really Trust the Payout From This High-Yield Stock? I skip over most high-yield stocks. You don’t need an MBA to understand why. These names often come with more red flags than a Communist Party parade, which explains why.
THL Credit, Inc.: This 12.7% Yield Looks Interesting
Should Investors Consider This High-Yield Stock? In today’s stock market, double-digit yielders certainly look attractive. But they can also be very, very risky. Quite often, investors put their money into an ultra-high yielder, only to find out that the company.
You Can Still Earn Safe 7% Yields in This Stock Market
This Country’s Stock Market Still Pays Safe, High Yields The U.S. stock market has surged. The S&P 500 index has jumped 10% over the past year. That represents one of the best performances of any country worldwide. But another stock.
CME Group Inc: This Income “Toll Booth” Just Hit an All-Time High
Up 370% on CME Group Inc, With a Lot More Upside Ahead This month, we revisit a financial giant that blasted through a volatile month for stocks. Regular readers know that we’ve often compared the stock exchanges to a toll.
Magna International Inc.: Consider This Solid Dividend Stock on the Cheap
Not a Market Favorite, But Deserves Investor Attention While there’s still plenty of uncertainty surrounding the world economy, stock market investors in the U.S. seem to be having a good time, at least in recent weeks. In fact, as of.
New York Mortgage Trust, Inc.: Does This 13% Yielder Deserve an Upgrade?
A Not-So-Perfect Double-Digit Yielder If you were to ask whether the dividend was safe at New York Mortgage Trust, Inc. (NASDAQ:NYMT) last year, the answer would be “no.” The reason is simple. Last year, the company declared total dividends of.
