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.
AmeriGas Partners L.P.: Earn a 10% Yield from This “Cash Cow” Business
Milk This Cash Cow for Dividends In a recent Income Investors post, I told you all about my favorite group of dividend stocks for earning safe returns: those with high yields. These companies don’t have much of a “cool factor.”.
USA Compression Partners LP: Unique Energy Play Offering an 11.2% Dividend Yield
1 High-Yield Stock to Consider Regular readers of this column would know that I’m a big fan of master limited partnerships (MLPs). MLPs often own infrastructure assets such as pipelines, earning a steady stream of income by operating “energy toll.
The Coca-Cola Co: Time to Bail on KO Stock?
Is Coca-Cola Stock Still Worth Owning? In the recent correction of the U.S. stock market, large-cap companies were hit particularly hard. For instance, The Coca-Cola Co (NYSE:KO) stock has tumbled more than six percent since the end of January, which.
CM Finance Inc: This 12.6% Yield Could Be an Opportunity
A High-Yield Stock You Likely Haven’t Considered Most people have never heard of CM Finance Inc (NASDAQ:CMFN), but the company provides one of the biggest yields in the current stock market. You see, for the most part of the last.
Green Plains Partners LP: Is This 10.7% Yield Safe?
Can You Trust This 10.7% Yield? Green Plains Partners LP (NASDAQ:GPP) wants to do a lot of good, both for the country and for unitholders. The master limited partnership (MLP) stores and transports plant-based ethanol fuels to be burned in.
5 Clean Energy Stocks Yielding Up to 10.7%
Earn Income from Clean Energy Investing in a clean energy project can create quite the income stream. If the wind blows or the sun shines, your equipment makes money. And unlike an oil well, these renewable sources of energy never.
Little-Known Stock Provides a 14.6% Income Stream
This High-Yield Stock Is Making a Turnaround High-yield stocks are usually not the safest bets, but income investors might want to make an exception for Sanchez Midstream Partners LP (NYSEAMERICAN:SNMP). Sanchez Midstream Partners, which used to be called Sanchez Production.
Up 72% on Raytheon Company… With More Upside Ahead
Raytheon Stock Is Soaring It’s a scary world out there… except for defense contractors. A few years ago, we noted America’s participation in a growing number of conflicts. We saw this aggression escalate further over the weekend, after President Donald.
3 Small-Cap Dividend Stocks Yielding Up to 14%
Can Small-Cap Stocks Deliver Big Returns? It’s no secret that large-cap stocks have been some of the most solid dividend payers. They often have well-established market positions and can afford to dish out generous dividends year after year. For instance,.
GasLog Partners LP: Time to Lock in This 8.7% Yield?
This Partnership Yields 8.7% Today’s chart highlights a big opportunity in the energy business: liquefied natural gas (LNG). Vast new supplies have sent natural gas prices plunging in the United States. But due to limited inventories and fast-growing economies, the.
