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.
MAT Stock: Earn 5% From This High-Dividend Stock
MAT Stock Is a High-Dividend Stock That Shouldn’t Be Ignored With interest rates at historic lows and saving accounts offering little or no interest, high-dividend stocks are a great way to earn income in the current environment. When it comes.
3 Reasons Why JNJ Stock Is Worth Owning Forever
Collect Reliable Dividends from Johnson & Johnson Stock Many dividend stocks have provided income investors with solid returns during the ultra-low-interest-rate environment over the past several years. One of them stands out: Johnson & Johnson (NYSE:JNJ) stock. The reason is.
Is CMCT Stock Yielding 5.6%+ Safe?
A High-Dividend Stock That Shouldn’t Be Ignored By Investors High-dividend stocks have many ways to pay out their dividends to shareholders. A few examples include the funds coming from the cash flow from operations, using a leverage balance sheet, or.
Estee Lauder Companies Inc: Is EL Stock Recession-Proof?
EL Stock: One Stock to Own Forever A patient dividend investor has two concerns with investing. The first is receiving a regular dividend and the preservation of the capital that the investment is made with. In order to satisfy the.
The Only Reason Investors Need to Own Microsoft Corporation (MSFT)
Microsoft Stock Delivers Big Returns Let’s be honest here; despite being in the tech sector, Microsoft Corporation (NASDAQ:MSFT) stock is far from being the most exciting name in today’s stock market. And the reason is simple: with so many trending.
Is Costco Stock a Great Dividend Growth Stock?
Costco Stock Should Be Taken Seriously Those searching for a great dividend growth stock may want to take a look at Costco Wholesale Corporation (NASDAQ:COST) stock. Costco is a specialty retailer and the dominant company in this segment of the.
LTC Properties: 1 Top Monthly Dividend Stock for 2017 and Beyond
Collect Reliable Dividends from This Monthly Dividend Stock Monthly dividend stocks can be a great fit for an income portfolio. Among the hundreds of monthly dividend stocks trading in the U.S. stock market, one company stands out. It has a.
INTC Stock: Intel Corporation Is Selling Shovels in the New Gold Rush
Intel Stock a Bet for the Future? When it comes to Intel Corporation (NASDAQ:INTC) stock, its three-percent dividend yield is probably the first thing investors think of. Indeed, unlike most of the companies in the tech world, Intel stock has.
American International Group: Why Investors Shouldn’t Ignore AIG Stock
American International Group Inc.:A Dividend Growth Stock Rewarding Shareholders One of the largest insurance companies with a global presence, American International Group Inc (NYSE:AIG) stock should not be ignored by dividend growth investors. When it comes to dividend growth stocks,.
TD Stock: The No. 1 Bank Stock for Dividend Investors?
Toronto-Dominion Bank Is a Top Dividend Stock Wholesale banking is a lucrative business. But, for income investors looking for a bank stock to add to their dividend portfolio, retail-focused Toronto-Dominion Bank (NYSE:TD) stock might be a better choice. Let me.
