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.
Price of High-Yielding Euroseas Stock Up 71% in 2023
ESEA Stock Is Set to Keep Rewarding Investors Soaring inflation, rising interest rates, and banks saying there was a 100% chance the U.S. would fall into a recession in 2022 or 2023 took the wind out of the sails of.
NNN REIT Stock: High-Yielder Reported Strong Q3 Results & Raised Guidance
Why NNN Stock Is Compelling at the Moment Real estate investment trusts like NNN REIT Inc (NYSE:NNN) have faced headwinds from the Federal Reserve’s aggressive interest rate policy. Since March 2022, the Fed has raised its rates 11 times. Why.
Outlook for 25%-Yielding ARMOUR Residential REIT Stock Is Robust
ARR Stock Is Well Suited for Income Investors Real estate investment trusts (REITs) like ARMOUR Residential REIT, Inc. (NYSE:ARR) have been facing pressure since March 2022. Why? The 11 interest rate hikes in the U.S. since that time, from near-zero.
Permianville Royalty Trust Stock: 16.6%-Yielder Declared 2nd Special Dividend of 2023
Current Oil Market Bodes Well for PVL Stock I last wrote about Permianville Royalty Trust (NYSE:PVL) in July, noting that the time was ripe for royalty trust stocks like PVL. My opinion on Permianville Royalty Trust stock hasn’t changed since.
Medical Properties Trust Stock Is a Contrarian 12.1%-Yielder
Second-Largest Non-Governmental Hospital Owner Populations are rapidly aging around the world, and I don’t see this trend reversing. That translates to an increasing demand for health care services. For a company like Medical Properties Trust Inc (NYSE:MPW), the strong tailwinds.
Uniti Group Stock: Undervalued 11%-Yielder Has 65% Upside
Why Investors Should Consider UNIT Stock Some technology companies are all about the flash. For others, they’re all about providing a service that everyone needs but no one really thinks about. That out-of-sight, out-of-mind approach has served Uniti Group Inc.
Sabine Royalty Stock: 10.3%-Yielder Hiked Monthly Payout 166%
Why Investors Should Pay Attention to SBR Stock Regardless of the future price of oil, the outlook for Sabine Royalty Trust (NYSE:SBR), an oil and natural gas company, is solid. When it comes to oil and gas price projections, analysts.
Bullish, 8.3%-Yielding Sabra Health Care Stock Has Moved on From Pandemic
Why SBRA Stock Has Gone Up in Past 6 Months The COVID-19 pandemic crushed stocks in virtually every industry. One sector that was hit really hard was health care. Nursing homes and health-care facilities experienced high infection rates, lower occupancy.
Ares Capital Stock: 9.7%-Yielding Alternative Bank Reported Another Strong Quarter
Why ARCC Stock Has Been Able to Pay Stable, Rising Dividends The Federal Reserve may have paused its unprecedented interest rate hikes, but the federal funds rate remains in the range of 5.25% to 5.5%, its highest level in nearly.
8.5%-Yielding NuStar Energy Stock Hit 52-Week High
NS Stock Has 23-Year Dividend Streak Oil prices are volatile and often have impacts on the operations of upstream energy companies. As such, it sometimes makes more sense for investors to play the midstream energy industry, which is less vulnerable.
