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.
5 Best Dividend Reinvestment Plans (DRIPs) for 2017
Best Dividend Reinvestment Plans for 2017 Building wealth takes time and effort. Luckily, there’s something called the power of compounding that can help investors achieve this goal. At Income Investors, we tend to look at companies that provide a steadily.
Cameco Stock: Hedge Funds Loading Up on This Dividend Stock
Smart Money Bullish on Cameco Stock Hedge funds are backing up the truck on Cameco Corp (NYSE:CCJ) stock. Billionaire Jim Simons owns 389,000 shares. Other Wall Street titans–including Ray Dalio, Ken Griffin, and Chuck Royce–have been quietly building positions. And.
AIG Stock: 1 Top Dividend Stock for 2017
Double-digit declines among large-cap stocks are a pretty rare occurrence these days. But that’s what almost happened on Wednesday when American International Group Inc (NYSE:AIG) stock plummeted nine percent after reporting disappointing quarterly results. As regular readers know, I’m constantly.
This Indicator Reveals Top Dividend Stocks Yielding Up to 7%
Where to Find Top Dividend Stocks Today The sector is hated in the press, but these are some of the top dividend stocks around. Analysts avoid this group. No one talks about them on the cocktail party circuit. But for.
Bristol-Myers Stock: Why This Is a Top Dividend Stock for Income Investors
Takeover Talk Surrounds Bristol-Myers Squibb My ears always perk up when takeover rumors swirl, especially when they involve large-cap dividend stocks. The latest big buyout buzz came on Tuesday, when Bristol-Myers Squibb Co (NYSE:BMY) stock popped three percent on whispers.
Top 10 Dividend ETFs to Invest in For 2017
Dividend ETFs for 2017 Dividend investing is an appealing way to receive a steady income. This is especially true in the current interest rate environment, with savings accounts offering near-zero-percent returns. Your goal at the end of the day is.
Dividend Reinvestment Plan (DRIP): Everything You Need to Know
Dividend Reinvestment Plan (DRIP) For many income investors, the purpose of owning dividend stocks is to collect a steady stream of income. And many dividend paying stocks have done that job quite well. In the ultra-low-interest-rate environment over the past.
Texas Instruments Stock: Why the Dividend Stock May Keep Rallying
I typically advise our readers to shy away from red-hot momentum stocks, especially large ones. The Texas Instruments dividend stock, for instance, is up a whopping 48% over the past year, easily outpacing the Dow’s return (at the time of.
Why Income Investors Shouldn’t Give Up on Coca-Cola Dividend Stock
Coca-Cola Stock Is Boring, but It Provides Exciting Dividends Stocks trading near their 52-week lows don’t usually get much attention, but that doesn’t mean income investors should ignore The Coca-Cola Co (NYSE:KO). The past year witnessed a tremendous bull run.
Taxes on Dividend and Capital Income Explained
Tax on Dividend Income When it comes to dividend investing, there are many things to consider before any investment is made. Dividend growth investors will look for a company that has a track record of increasing its dividend every year..
