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.
3 High-Dividend ETFs Yielding Up to 16.6%
Earning a Double-Digit Yield From an Exchange-Traded Fund? Income investors love high-dividend stocks. But at the same time, we are also concerned about the risk associated with owning high-yield tickers. So today, I’m going to show you a way to.
Walmart Inc: Low Dividend Yield Today, High Dividend Growth Tomorrow
WMT Stock Is a Top Pick for Dividend Growth Investors As the stock market surges past its all-time high, dividend yields have become suppressed. Even Walmart Inc (NYSE:WMT), a longtime favorite for income investors, can no longer offer an attractive.
CBL & Associates Properties, Inc.: This Turnaround Stock Yields 17.5%
This High-Yield REIT Pays 17.5% Americans love a comeback story. And in the financial world, comeback stories can represent lucrative investment opportunities. From time to time, good companies get in trouble. During these periods, you can sometimes lock in a.
Own a Slice of 154,000 Acres of Farmland With This 1 Investment
If You Want Income, Should You Look Here? I started my career in the wealth management office of a small town. Much to my surprise, some of our richest clients came from rural areas outside of the big cities. A.
CBL & Associates Properties, Inc.: This 17.5% Yield Is Surprisingly Safe
Lock in a Double-Digit Yield From CBL Stock Usually, I tend to stay away from companies that have cut their dividends before. That’s because, once management has reduced their company’s payout to shareholders, they wouldn’t be shy about doing it.
HCLP Stock: This 24.8% Yield Is No Joke
An Ultra-High Yielder to Think About In today’s market, dividend yields higher than 20% are usually too good to be true. But you just might want to make an exception for Hi-Crush Partners LP (NYSE:HCLP). Hi-Crush Partners produces something called.
Should Investors Consider This Monthly Dividend Stock’s 12.1% Yield?
This Company Pays Oversized Monthly Dividends Over the past several years, monthly dividend stocks have been highly sought after. As a result of increased investor enthusiasm, prices of the most well-known monthly dividend payers have already been bid up, causing.
Is Enable Midstream Partners, LP’s 7.5% Yield Safe?
Can You Trust This Payout? If you want to earn higher yields, you have to think differently from other investors. Blue-chip dividend stocks don’t cut it anymore. Income hunters need to seek out lesser-known niches like business development corporations (BDCs).
Warren Buffett Loaded Up on GM Stock, Should You, Too?
Buffett Bought Another 1.4 Million Shares of General Motors Stock With words like “trade wars” and “tariffs” often mentioned in the news, the U.S. automotive industry hasn’t been a stock market favorite lately. However, that did not stop Warren Buffett.
Enbridge Energy Partners, L.P.: Is This 12.2% Yield Safe?
A Double-Digit Yielder You Likely Haven’t Thought Of As I have said many times in this column, dividend safety is of utmost importance to income investors. If you want to use your dividend income to cover day-to-day expenses, you should.
