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.
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,.
Where I’m Finding 10%+ Dividend Yields
This Dividend Yield Tops 10% If you want to earn big dividend yields, you have to go where others fear to tread. Investors have already grabbed the obvious ideas. But if you’re willing to pick through the market discount bin,.
MSC Industrial Direct Co Inc Hikes Dividend 21%
MSC Industrial Direct Co Inc Hikes Dividend Today’s chart highlights one of the first winners from President Trump’s tax cuts…MSC Industrial Direct Co Inc (NYSE:MSM). Regular readers know the hopes of a big tax cut from Washington got us pretty.
LOW Stock: This Dividend King Raised Payout by 156% in the Last Five Years
Top Dividend Growth Stock to Consider If you’ve been following the stock market, you would know that investors aren’t exactly enthusiastic about the retail sector right now. Due to the rise of the e-commerce industry, many brick-and-mortar retailers have reported.
SMLP Stock: An Improving Business with a High Yield of 11.2%
1 High-Yield Stock Worth Mentioning If you take a look at stocks with dividend yields north of 10%, you’d see that most of them aren’t perfect. Whether they are impacted by a cyclical downturn or a secular shift in the.
SNH Stock: An 8.2% Dividend Yield That Has Plenty of Room to Grow
A Long-Term Play for Income Investors High-yield stocks are not known for having the best growth prospects. Think about it: if a company pays a generous dividend and has huge growth potential, investors will rush toward it, bidding up the.
COP Stock: This Could Be a Great Energy Play for 2018
An Upstream Company for Income Investors? I always say that for income investors, the best energy investments are midstream partnerships. Some of these partnerships run fee-based businesses backed by long-term contracts, allowing them to pay a steady dividend even during.
Citigroup Inc Announces Redemption of Series AA Preferred Stock
Citigroup Series AA Preferred Shares Plunge Today’s Citigroup Inc (NYSE:C) news highlights one of the biggest risks of preferred shares: redemptions. On Tuesday, the bank announced it would redeem its entire offering of Citigroup Inc Preferred Series AA (NYSE:C-P). In.
This REIT’s 10.1% Dividend Yield Really Is Safe
Lock in This 10.1% Dividend Yield You have to work hard to find a good dividend yield nowadays. Most bonds pay next to nothing, and anything with a decent payout tends to be risky. But today’s stock should inspire confidence..
Bank of the Ozarks Inc Increases Quarterly Dividend
Bank of the Ozarks Hikes Dividend Today, we take a peek at Bank of the Ozarks Inc (NASDAQ: OZRK) and note that things can’t be all bad in America. We’ve featured many charts highlighting the strength of the U.S. economy..
