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.
Dividend News: Red Hot Economy Fuels More Dividend Increases
Stocks Poised for Higher Open U.S. stocks opened higher Thursday morning, as investors shift their focus on earnings and new economic data. The Dow Jones Industrial Average opened the session up 181 points. The tech-heavy Nasdaq and broader-based S&P 500.
These “Alternative” Banks Yield Up to 18.6%
Little-Known Funds Yield 9.2%+ You may have sensed a lingering disturbance in the investment world, and a vague, unsettling feeling that a better way to make money is hiding just out of view. While you collect meager yields in bonds.
EPR Properties: Earn Monthly Dividends With a 6.5% Yield
A Monthly Dividend Stock to Think About If you want to collect monthly dividends, one sector deserves your attention: real estate. In particular, I’m talking about real estate investment trusts (REITs). REITs are basically giant landlords. Because these companies collect.
DKL Stock: Collect Growing Dividends From This 10.9% Yielder
A High-Yield Stock You Likely Haven’t Considered In this day and age, a dividend yield north of 10% may seem too good to be true. What’s even more surprising, though, is that this double-digit yielder also delivers consistent payout increases..
Is Annaly Capital Management, Inc.’s 11.7% Yield Safe?
Time to Lock in This Yield? I like investing in mortgage real estate investment trusts (REITs). In a sense, these little-followed firms work like banks, lending money at higher interest rates than it costs them to borrow. For example, a.
Dividend News: Strong Economy Fueling Distribution Hikes, Special Dividends
Stocks Drop on Trade Fears U.S. stocks plunged at the start of Wednesday’s session, as trade tensions between the U.S. and other major countries intensified. The Dow opened the trading day lower by about 210 points. The tech-heavy Nasdaq and.
Uniti Group Inc: This 11.5% Yield Is No Joke
Earn a Double-Digit Yield From UNIT Stock There is no other way to put it: The U.S. stock market seems to be losing its momentum. Year-to-date, the market has been trading mostly sideways, with the S&P 500 index returning a.
5 Dividend Stocks I’d Buy with $5,000
These Stocks Yield Up to 5% If I handed you $5,000 right now, what would you spend it on? For many households just scraping by, such a stroke of luck could cover an emergency. I suspect most Americans, though, would.
Enviva Partners LP: Already Yielding 8.6%, with More Payout Increases to Come
A Top Dividend Growth Stock You Likely Haven’t Thought About Despite what economists have been saying, inflation is actually happening. That means that for investors who want to live off the dividends from their stock portfolio, a steady payout stream.
Kimco Realty Corp: Top Real Estate Stock Pay a Generous 6.7%
A High-Yield Stock You Likely Haven’t Thought About In an earlier column, we analyzed the highest-yielding S&P 500 company. Now, let’s take a look at the second-highest-yielding component of the benchmark index, Kimco Realty Corp (NYSE:KIM). As the name suggests,.
