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.
NRZ Stock: An 11.15% Yield That’s Actually Safe
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WES Stock: An 8% Dividend Yield That Grows Every Quarter
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TEP Stock: This MLP’s 8.7% Yield Really is Safe
This Payout Has Increased 575% It’s not easy to find yield nowadays. Most safe investments pay out next to nothing. If you want a good, double-digit distribution, get ready to do a lot more digging. Aside from a few small.
SXCP Stock: This 14.0% Yield Could Be an Opportunity
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PSA Stock: An Income Stream That Grows 14.9% Every Year
This Top Dividend Stock Grows Its Payout at a Double-Digit Pace Over the last several months, we have profiled a lot of companies with 10%+ dividend yields. Today’s top dividend stock doesn’t offer as much in terms of current payout,.
STWD Stock: Collect a Growing Dividend Yield of 8.9%
Top High-Yield Stock You Likely Haven’t Considered In an era where most companies pay less than four percent, an investor would be considered lucky if they can lock in a yield north of eight percent. And that’s why Starwood Property.
DRAD Stock: A 9.6% Yielder You Likely Haven’t Considered
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GasLog Partners LP: Where I’m Finding 9%+ Yields
Small-Cap Stock Yields 9.1% Call it a case of “idea incest.” For the most part, income hunters don’t look beyond the standard list of dividend darlings. The same old group of big, reliable stocks come up in every conversation. But.
HCN Stock: “Boring” Real Estate Stock Delivers Market Beating Returns
58% Total Return in Less Than 3 Years The real estate industry is known for producing a steady stream of rental income. But with the right investment, it can deliver some serious total returns too. Case in point, if an.
NS Stock: Why Income Investors Shouldn’t Ignore This 15.77% Dividend Yield
1 High-Yield Stock to Consider In today’s market, stocks with ultra-high yields usually carry a significant amount of risk. As income investors, the key is to differentiate between risks that are temporary from those that are permanent. The good news.
