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.
Shell Midstream Partners LP: Can Investors Count on This 15.3% Yield?
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Antero Midstream Corp: Natural Gas Stock With 13.2% Dividend Up 121% YoY
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Realty Income Corp: The Best Monthly Dividend Stock Ever?
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Main Street Capital Corporation: Safe, Growing 6.9% Dividend Paid Monthly
Main Street Capital Stock: High Dividend & Stock Growth Main Street Capital Corporation (NYSE:MAIN) is an excellent, overlooked stock that provides investors with long-term growth no matter how you look at it. MAIN stock provides a frothy, monthly dividend with.
Brookfield Infrastructure Partners L.P.: Blue-Chip Stock with Generous & Growing Payout
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Ares Capital Corporation: The Best 9% Yielder on the Market?
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National Health Investors Inc: Overlooked Dividend Stock With 6.5% Yield
National Health Investors Stock Dividend Rises 5% During Pandemic The outbreak of COVID-19 wreaked havoc on the global economy and sent the stock market crashing. While the coronavirus pandemic has impacted every corner of the population, some have been hit.
APTS Stock: Don’t Ignore This Beaten-Up REIT With 8.5% Yield
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USD Partners LP: Under-the-Radar $5 Stock Now Yields 8.9%
Little-Known Stock With a Big Yield At first glance, USD Partners LP (NYSE:USDP) seems like just another beaten-down name from the energy sector. If you take a closer look, though, you’ll see that this low-priced stock actually offers a jaw-dropping.
