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.
General Dynamics Corporation Raises Cash Payment to Shareholders
GD Stock Increases Its Dividend by 10.7% As one of the biggest defense contractors in the world, General Dynamics Corporation (NYSE:GD) stock has had a huge rally over the last several years. What’s lesser known is that, other than providing.
Buckeye Partners L.P.: This 11.4% Yield Looks Like a Safe Bet
Safe Stock Yields 11.4% We love betting on the underdog, hitting the trifecta at the Kentucky Derby, or calling the long-shot winner during March Madness. But you have to say something about the reliable performer that shows up night in.
62 Consecutive Dividend Hikes from a Company You Likely Haven’t Considered
Dividend King Continuing its Track Record Considering what happened to Detroit’s “Big Three” automakers in the last financial crisis, the automotive industry doesn’t seem to be the best place to earn recession-proof dividends. Indeed, due to the cyclical nature of.
The Best 10.5% Yield You’ve Never Heard Of
This Stock Yields 10.5% The U.S. spends $400.0 billion a year on long-term healthcare — more than the gross domestic product of Norway. That straightforward number represents a seriously big industry. But with over 10,000 baby boomers turning 65 each.
The Progressive Corporation: Boring Business Delivers Exciting Returns
Progressive Delivers on Income Most people recognize The Progressive Corporation (NYSE:PGR) as the company that invades their living rooms with relentless “name your own price” and “Flo: The Insurance Girl” TV commercials. But for our paid Passive Monthly Income subscribers,.
GasLog Partners LP: This Stock Pays Out 8.9%
Upside for This Dividend Payer Over the coming decades, few businesses will likely make more money than liquefied natural gas (LNG) exports. New technologies have unlocked vast supplies of energy across the country. Natural gas prices have fallen so low,.
Global Net Lease Inc: This 12.3% Dividend Yield is No Joke
High Dividend Yield Backed by a Solid Business Today’s article highlights one of my favorite places to find high yield opportunities: real estate. I’m not talking about flipping houses. I’m talking about using real estate assets to generate a steady.
This Energy Stock Pays Only 6.6%, But Its Payout Has Been Growing Every Quarter
Dividend Growth Opportunity in the Energy Sector? Because of the downturn in oil and gas prices, many energy companies saw huge drops in their share prices. And due to the inverse relationship between stock price and dividend yield, some of.
New Mountain Finance Corp.: This 10.4% Dividend Yield is Worth a Look
1 High-Yield Stock to Consider Today’s article highlights one of the most overlooked high yield companies in the current stock market, New Mountain Finance Corp. (NYSE:NMFC). Based in New York City, New Mountain Finance Corp. is a closed-end investment company..
How to Invest In Dividend Stocks
Spotting Great Dividend Stocks Today’s Income Investors post will look a little unusual. While we normally feature essays, today you’ll find an interview with site Editor-In-Chief Robert Baillieul. Last week, we did a quick question-and-answer session on investing, financial markets,.
