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.
Altria Group Inc: Safe 7% Dividend Yield & Rising Payouts
Altria Stock Has Raised its Dividends for 51 Consecutive Years Some investors don’t like so-called sin stocks. The idea of investing in companies that make money from things like gambling, weapons, or alcohol is off-putting for some. But those who.
New Mountain Finance Corp.: Insiders Have Loaded Up on This 9.9% Yielder
This High-Yield Stock Could Be Special As income investors, we all want to earn a high yield. But the blunt reality is, in today’s market environment, most high-yield stocks aren’t the safest bets. And if the yield approaches double-digits, the.
Toronto-Dominion Bank: This Foreign Bank Stock Is a Passive Income Machine
Looking for Reliable Dividends? Read This If you want to earn reliable passive income from stocks, you generally have to look at recession-proof industries. The reason is simple: in a recession, many companies cut their dividends. So if you plan.
Phillips 66 Partners LP Poised for Market Rebound
Phillips 66 Partners Stock: Big Dividend & Rising Share Price Oil and gas stocks plunged in the early days of the coronavirus pandemic, but with vaccines rolling out and the global economy set to rebound, many oil and gas stocks.
Monroe Capital Corp: Rising Share Price & Safe 10% Dividend
Monroe Capital Stock Is a Dividend Beast Everyone wants to get more from their dividend stocks. Interest rates might be on the rise, but they’re still near record lows. And blue-chip stocks, while financially solid industry giants, do not pay.
BP Midstream Partners LP: This 11.2% Yielder Could Be Special
One High-Yield Stock to Think About Among high-yield energy stocks, BP Midstream Partners LP (NYSE:BPMP) is a name that stands out. The reason isn’t just its yield. No doubt, BPMP stock has a very generous payout at its current price,.
Hess Midstream LP: 8.4% Dividend & Rising Share Price
Hess Midstream Stock Has Raised its Dividends for 15 Quarters Straight If you’re looking to get in on the rebounding global economy, the energy sector—and Hess Midstream LP (NYSE:HESM), in particular— might be a good place to start. Not only.
DHT Holdings Inc: Undervalued Stock Pays a Frothy 17.3% Dividend
DHT Stock Remains a Long-Term Passive Income Hog The crude oil tanker industry took a massive, unprecedented hit in 2020, with profits going from their highest to lowest ever in just under a year. But with the rollout of COVID-19.
Walt Disney Co: Will Disney Stock Bring Back Its Dividend?
Don’t Ignore DIS Stock Some income investors may have dropped Walt Disney Co (NYSE:DIS) from their radar. The reason seemed obvious: in May 2020, the company announced that it would not be paying the semiannual cash dividend for the first.
Lument Finance Trust Inc: Little-Known Stock Now Yields 9.8%
This Dividend Stock Could Be Special Owning stocks for income seems to be a thing of the past. As I write this, the average dividend yield of all S&P 500 companies has dropped to 1.5%, which is way below the.
