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.
HD Stock: Why Home Depot Inc is a Top Dividend Stock
Patience doesn’t always pay off. Earlier this month, I wrote that Home Depot Inc (NYSE:HD) was an investment that I’d own in a heartbeat if the price was just a little bit lower. Well, since that article just a few.
How Rising Interest Rates Will Affect Dividend Stocks
Impact of Interest Rates On Dividend Stocks Income investors have two major goals: to generate a steady income and preserve the capital invested into a company. With interest rates near record lows and gradually increasing, the impact will be felt.
Top 10 ETFs for Retirement Investors
Best ETFs for Retirement Dividend stocks have been playing a crucial role helping investors save for retirement. After investors enter their retirement, dividend-paying stocks can also provide a steady stream of income. But what if you don’t have the time.
KO Stock: This 131-Year-Old “Forever Asset” Crushes The Market
The Ultimate “Forever Asset” The Coca-Cola Co (NYSE:KO) stock is the ultimate “Forever Asset.” The company has created thousands of millionaires; not to mention, the soda giant has been a holding in Warren Buffett’s investment portfolio for decades. And for.
Why Coach Inc Is a Top Dividend Stock: A Stylish 3.6% Yield
Coach Inc (NYSE:COH) is finally gaining some positive momentum. After plummeting sharply over the latter half of 2016, COH stock has already bounced 10% in 2017 and is up about 15% from its 52-week lows set in December. The luxury.
Dividend Stocks: Top Defense Stocks to Watch in 2017
Defense Stocks to Buy in 2017 For the most part, aerospace and defense stocks haven’t been the most exciting dividend stocks, but they turned out to be some of the biggest winners in the U.S. stock market in recent months..
What to Expect from Warren Buffett’s 2017 Annual Letter
What to Expect from Warren Buffett’s 2017 Annual Letter Warren Buffett and his company, Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B), need no introduction to investors, thanks to their long history of generating market-beating returns. This Saturday, Buffett plans to release his.
Why PM Stock Is a Top Dividend Pick: An Attractive Yield of 4%
Philip Morris International Inc. (NYSE:PM) stock is on a tear. After falling sharply over the last couple of months in 2016, Philip Morris stock has already gained 14% in 2017 and is up about 20% from its 52-week lows in.
Top 10 Safe Dividend Stocks for Retirees in 2017
Safe Dividend Stocks for Retirees For most retirees, the goal of investing is to generate a steady stream of income. There are quite a few ways to do it: you can deposit the money in a bank and collect interest,.
Earn 7%+ Yields by Investing in Rental Properties
If You’re Thinking of Investing in Rental Properties, Read This First One of the questions I get a lot from friends and family concerns investing in rental properties: “Prices got crushed in 2008. Is owning real estate too risky? Is.
