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.
MRCC Stock: A 9.8% Yielder That Could Benefit from Rising Interest Rates
Consider This High-Yield Stock If you own a portfolio of high-yield stocks, there’s one thing you should definitely pay attention to—rising interest rates. Due to the last financial crisis and the ensuing economic recession, the U.S. Federal Reserve kept the.
A Secure and Growing 8.2% Yield in Energy
This 8.2% Yield Really is Safe Today, we look at an industry that cranks out some of the highest yields around: pipelines. Longtime readers know America’s booming oil output has driven big gains for these partnerships. With more crude flowing.
AMZA Stock: Lock in a 24.3% Yield for 2018?
High-Yield Investment You Likely Haven’t Considered When it comes to earning a high dividend yield from the U.S. stock market, things don’t get much better than this. I’m talking about InfraCap MLP ETF (NYSEARCA:AMZA), an exchange-traded fund (ETF) that invests.
DLR Stock: Combining Technology and Real Estate to Produce 12% Dividend Growth Every Year?
This Company is Well-Positioned for Another Dividend Increase The technology sector has produced some of the fastest-growing companies in today’s stock market. The real estate sector, on the other hand, is known for its ability to generate a steady stream.
FDUS Stock: Little-Known Investment Company Pays a Yield of 10.3%
Is FDUS Stock a Top High-Yield Stock? Most people have never heard of Fidus Investment Corp (NASDAQ:FDUS), but the company deserves income investors’ attention for a very simple reason: it offers a double-digit dividend yield. Just think about that. The.
How to Collect a 9.2% Yield From the IRS
Earn a 9.2% Yield From “Uncle Sam” You can’t call me a fan of the government. As one of those “Don’t Tread on Me” types, I resent how much the Feds collect in taxes. Never mind how much of that.
ADES Stock: Should You Consider This 10.4% Yield from the Coal Industry?
A Worthy Investment in the Coal Industry? The biggest problem with investing in ultra-high yielders is that most of these companies aren’t in the best of shape. In fact, stocks with double-digit yields often come from down-and-out industries. Because investors.
AHC Stock: A Surprising Reason to Consider This 6.6% Yielder
1 Unique Opportunity As income investors, we like stocks that can pay a stable—and hopefully increasing—stream of dividends. This means we are always on the lookout for companies with a steadily growing business. Today, however, I would like to talk.
AHT Stock: Why Insiders Love This Real Estate Stock’s 7.3% Yield
Is This High-Yield Stock Worth a Look? There are many angles of looking at dividend stocks. You can study a company’s financials, go through its dividend history, and evaluate industry dynamics. Today, however, I would like to go over a.
AGNC Stock: This Monthly Dividend Stock Offers an Oversized Yield of 10.8%
If You Want to Earn a Passive Monthly Income, Read This If you ask an income investor how often they would like to get paid, the answer will likely be “the more frequent, the better.” And that, my dear reader,.
