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.
These Dividend Stocks You Shouldn’t Miss in 2017
What Railroad Stocks Does Warren Buffett Own? In 2010, Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) purchased Burlington Northern Santa Fe Corporation for more than $26.0 billion. At the time, it was Berkshire’s biggest acquisition ever. The purchase was made.
STAG Stock: This Monthly Dividend Stock Is Now Yielding 5.2%
STAG Industrial Is a Top Monthly Dividend Stock For income investors who want to use the “buy-and-hold” strategy, few things are better than monthly dividends. The problem is that among the thousands of companies trading on U.S. stock exchanges, only.
WFC Stock: Why Wells Fargo & Co Is the Perfect Dividend Stock
Consider Wells Fargo Stock for Its Dividends If you asked me to draw a sketch of the perfect dividend stock, it would probably look something like Wells Fargo & Co (NYSE:WFC) stock. Wells Fargo is a bank, and a very.
If You Want Steady Dividend Income, Read This
Earn Passive Income from Wind Energy The recession hit many parts of America’s heartland hard, but business has held up in Crosby County, Texas. A nearby construction project is the reason. Hundreds of workers have flooded in, filling the motels.
Lock in Omega Healthcare’s Healthy 7.8% Dividend Yield
Today’s article explains one the key things I look for in high dividend yield plays: positive momentum. Now, I know what you are asking: “Aren’t you a die-hard value investor? Since when did you start following chart patterns?” Well, rest.
The 7.7% Income Stream You Likely Haven’t Considered
All-Weather Bond Fund Yields 7.7% Does this sound familiar? Your head says, ‘I need stocks if I’m ever going to put away a big nest egg.” But your gut says, “Safety. Yield. And I don’t want anything that will plunge.
Nike Stock: Nike Inc Is Setting Up to Reward Income Investors Big Time
Nike Stock Is a Top Pick for Income Investors For income investors with a long-term horizon, consumer staples companies are generally preferred to consumer discretionary ones. However, there is one name in the consumer discretionary sector that still deserves the.
5 Dividend Stocks to Hold for the Next 20 Years
Which Stocks to Buy and Hold for the Next 20 Years When sitting down today and looking for investments worth owning over the next 20 years, my first question was where to begin looking. Luckily, you won’t have to go.
AmeriGas Stock: This “Cash Cow” Yields 8.3%
Earn an 8.3% Yield from This Cash Cow Today, I’m going to share my favorite way to spot yields in the stock market ranging from five to nine percent: “cash cows.” I coined the term “cash cow” to describe mature.
GE Stock: Will General Electric Company Raise Its Dividend in 2017?
Dividend Analysis of GE Stock General Electric Company (NYSE:GE) is a well-known name for income investors. The company has been paying dividends for more than 100 years and is currently offering a very attractive yield. But due to its dividend.
