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.
Why Investors Should Consider This 11.9% Dividend Yield
Little-Known Stock Offers a Double-Digit Payout Today’s chart highlights what’s perhaps the most overlooked high-yield stock in the current market, Uniti Group Inc (NASDAQ:UNIT). Headquartered in Little Rock, Arkansas, Uniti Group is in the business of acquiring and building mission-critical.
Martin Midstream Partners L.P.’s 13.7% Dividend Yield Is Worth a Look
Can a Double-Digit Yield Possibly Be Safe? Most people have never heard of Martin Midstream Partners L.P. (NASDAQ:MMLP), but it offers one of the highest payouts in the current stock market. Headquartered in Kilgore, Texas, Martin Midstream Partners is a.
Costco Earnings: Will Costco Stock Deliver Another Dividend Increase?
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Sabra Health Care REIT, Inc.: Is This 10.2% Yield Safe?
This 10.2% Yield Looks Tempting It’s an income desert out there. Bonds yield next to nothing. The stock market trades near record highs. So, if you do see a decent yield out there, it raises suspicion. After all, if the.
Walmart Inc: 1 Dividend Stock for the Next 50 Years
WMT Stock Is a Top Pick for Income Investors If you are searching for a stock to put in a “set and forget” dividend portfolio, then look no further than Walmart Inc (NYSE:WMT). As the biggest retailer in the world,.
Apollo Investment Corp.: A 10.5% Yield You Likely Haven’t Considered
Little-Known Stock Provides a Big Payout Today’s chart highlights one of the most generous dividend-paying companies in the current stock market: Apollo Investment Corp. (NASDAQ:AINV). To most people, Apollo Investment Corp. isn’t a familiar name. That’s because the company doesn’t.
Collect Rising Dividends from This Overlooked Company
A Dividend Growth Stock to Consider The beauty of income investing is that it allows boring businesses to deliver exciting returns. A few percent in dividends may not seem like much. But if a company can consistently raise its payout,.
BP Prudhoe Bay Royalty Trust: This “Cash Cow” Now Yields 17.3%
Milk This Stock for a 17.3% Yield Today’s post highlights one of my favorite places to find high dividend yields: “cash cows.” As regular readers know, cash cows represent mature businesses. Because these firms have few growth prospects, owners milk.
Two High-Yield Stocks to Own Forever
Lock in High Dividend Yields That Are Also Safe Even after multiple rate hikes from the U.S. Federal Reserve, savings accounts are still paying next to nothing. That’s why over the last several years, more and more income investors have.
Northrop Grumman Corporation: Two Dividend Hikes in Four Months?
Top Dividend Growth Stock You Likely Haven’t Considered Income investors are always on the lookout for high-yield stocks. But sometimes, low yield companies can provide faster dividend growth. For instance, with an annual yield of 1.47%, I doubt that Northrop.
