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.
EQT Midstream Partners LP: This 8.3% Yield Looks Like an Opportunity
A High-Yield Stock to Think About In a market where most companies pay less than four percent in dividends, an 8.3% yield certainly grabs income investors’ attention. I’m looking at EQT Midstream Partners LP (NYSE:EQM), a master limited partnership (MLP).
How to Earn a Dividend Check Every Month of the Year
These Stocks Yield Up to 18.1% Regular readers know I gush over dividend stocks, but they do have one drawback: quarterly payouts. The right business can make for a great source of income. But with their infrequent payments, investors have.
Sachem Capital Corp: Lock in a 10.5% Yield From This Penny Stock
Little-Known Company Pays Huge Dividends As an income investor, I like large companies with established market positions due to their ability to pay stable dividends. However, that doesn’t mean we should ignore small companies altogether. Case in point: Sachem Capital.
This 90-Year-Old Company Still Churns Out Record-High Profits (and Dividends)
A Dividend-Growth Stock You Likely Haven’t Thought Of Income investors love established companies with large market capitalizations. This is because, in order to become a large-cap stock, a company usually has to build a strong presence in its operating market..
Sunoco LP: Is This 12% Yield Real?
Can You Trust This Payout? A 12% yield feels like Bigfoot riding a unicorn on the believability index. High payouts look tempting. Typically, though, big dividends get cut sooner or later. But once in a while, you come across a.
TCPC Stock: This 10% Yield Could Go Even Higher
This High-Yield Stock is Worth a Look Today’s chart highlights one of my favorite double-digit yielders in the market, BlackRock TCP Capital Corp (NASDAQ:TCPC). The company used to go by TCP Capital Corp, but changed to the current name after.
Barnes & Noble, Inc.: Why You Should Check Out This 10.9% Yielder
A Beaten-Down, High-Yield Stock In today’s stock market, there is usually a trade-off between income and growth. That is, if a company offers an oversized income stream through an ultra-high dividend yield, chances are it’s not in the best position.
Is This Company the Next Berkshire Hathaway?
This Stock Has Returned 13,800% In the back of every investor’s mind is the stock that got away and became a huge success. Consider Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B), which grew from a small textile manufacturer into a financial behemoth..
Great Elm Capital Corp: Earn Monthly Dividends With a 10.3% Yield
A Monthly Dividend Stock Most People Have Never Heard Of When it comes to monthly dividend stocks, most investors would probably think about the real estate sector. Indeed, because tenants have to pay rent on a monthly basis, many real.
These Royalty Income Streams Pay Up to 17.7%
The New Source of Income It was early spring in 1983 when Sting and his band The Police wrote one of the most popular songs of the decade. Sitting at a studio on the Caribbean island of Montserrat, the group.
