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.
FedEx Corporation: The Most Overlooked Reasons to Own FDX Stock
FDX Stock Continues to See Growth Going Forward FedEx Corporation (NYSE:FDX) stock is one of the largest package delivery companies that operates globally. As an investor, FDX stock is a great investment to consider because of the growth opportunities. A.
BEP Stock: A Dividend Growth Stock Yielding 6.0%
BEP Stock Rewarding Dividend Growth Investors As an income investor, the number-one goal should be to find a dividend growth stock. This is because the purpose of income investing is to invest in companies that have growing earnings and that.
Gap Inc: Here’s Why Gap Stock Went Crazy On Thursday
Gap Stock Surges in After-Hours Trading Gap Inc (NYSE:GPS) stock had quite a dramatic day on Thursday. It first tumbled nearly four percent in the regular trading session. Then, in after-hours trading, GAP stock surged more than 10%. Let’s take.
MSFT Stock: Is Microsoft Corporation a Good Income Play?
Don’t Underestimate Microsoft Stock’s Dividend Potential In today’s stock market, income investors typically have to choose between two sets of stocks: those with a decent yield today but not much growth potential, and growth stocks that forgo their current dividends..
Boeing Co: Is BA Stock a Top Dividend Growth Stock?
BA Stock Continues to Reward Shareholders Boeing Co (NYSE:BA) is a company that dividend growth stock investors should observe closely. There are two types of dividend growth stocks: a company that grows revenue and shares profits with shareholders and a.
TGT Stock: Time to Bail On Target Corporation?
Why Income Investors Shouldn’t Give Up On Target Stock When people are expecting drones to deliver groceries to their doorsteps in the near future, Target Corporation (NYSE:TGT) stock doesn’t look very appealing. Last year, it returned a disappointing negative 0.5%..
Macy’s Stock: Why Is Macy’s Inc Getting Hammered Today?
Macy’s Stock Plunges in After-Hours Trading 2016 was a good year for the U.S. stock market, but Macy’s Inc (NYSE:M) stock lagged behind. In 2017, it’s not having a good start either. Macy’s stock plunged more than 10% in after-hours.
PepsiCo, Inc.: 3 Reasons to Be Bullish on PEP Stock
PEP Stock Should Be Considered a Stock to Own PepsiCo, Inc. (NYSE:PEP) stock is a company that continues to reward its shareholders. Shares of PEP stock are up 68% over the past five years. As an investor, you may be.
Orchids Paper Products Stock: Is 5.3% Yield Safe?
TIS Stock: A High-Dividend-Yield Stock Yielding 5.26% Orchids Paper Products Company (NYSEMKT:TIS) stock would satisfy the need for investors seeking a stock with a high-dividend yield. A manufacturer of paper towels, bath tissue and paper napkins, the concern with this.
General Motors Company: Can GM Stock Reward Shareholders?
Upside for GM Stock? Over the past five years, General Motors Company (NYSE:GM) stock has been stuck in a trading range. As such, the question investors are asking is, “Is the market missing something, or is GM stock not a.
