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.
Insurer Authorizes Special Dividend to Shareholders
Investors Can Cash In on This Special Dividend Payment I like companies that pay dividends. I like those companies even more when they supplement their payments with the occasional special dividend. Case in point: RLI Corp (NYSE:RLI). In November, this.
Oasis Midstream Partners LP: Is This 20% Yield for Real?
A Double-Digit Yielder to Think About What is a high-yield stock? Well, the answer can vary depending on the perspective. If you look strictly at blue-chip stocks, a five-percent yield would put a company among the higher-yielding names. In the.
Coca-Cola Co: Why Income Investors Should Check Out KO Stock Now
Is Coca-Cola Stock Still Recession-Proof? With Coca-Cola Co’s (NYSE:KO) reputation as one of the most recession-proof businesses in the world, you’d think its stock would do well during this year’s COVID-19 pandemic. I mean, even though the pandemic-induced recession has.
This 9.3%-Yielding “Alternative Bank” Pays Investors Monthly
Looking for Oversized Dividends? Read This… Today I’m highlighting an alternative bank that’s extremely income-investor-friendly: Gladstone Capital Corporation (NASDAQ:GLAD). If you’re new to my writing, you may be wondering what I mean by “alternative bank.” Well, I consider an alternative.
Is Iron Mountain Inc’s 9.2% Yield Safe?
Can Income Investors Trust Iron Mountain Inc’s Dividend? If you visit my office, you’ll find stacks of documents—mortgage information, financial reports, business receipts, etc. Over the years, the wall of paper has come to take up two filing cabinets and.
Colgate-Palmolive Company: A “Sleep Well at Night” Dividend King
This Company Provides Safe & Growing Payouts With the U.S. stock market trading a record levels, some investors might be wondering if things are due for a correction. And frankly, if you take a look at the fundamentals, equities do.
After a Strong Rally, B&G Foods, Inc. Still Offers a 7.1% Yield
This High-Yield Stock Deserves a Look Generally speaking, income investors don’t like to buy stocks after they’ve shot through the roof. The reason lies in the inverse relationship between dividend yield and stock price. For instance, many solid dividend-paying companies.
Brown-Forman Corporation: “Boring” Business Delivers Exciting Returns
Brown-Forman Corporation Keeps Beating the Market This year, “boring” businesses have posted the most exciting returns. People always need to buy staples like food, toothpaste, cigarettes, deodorant, cereal, and toilet paper. Even in the midst of the COVID-19 pandemic, demand.
Magellan Midstream Partners, L.P.: The Best 10% Yielder on the Market?
Take a Good Look at This High-Yield Stock The upward momentum in the U.S. stock market might be strong, but not every ticker has been shooting through the roof. In fact, even after the post-election rally—which was boosted by positive.
Can Kinder Morgan Inc Fund Its 7.4% Dividend Yield?
The Skinny on Kinder Morgan Inc’s Fat 7.4% Dividend Yield Evaluating a company’s dividend nowadays is quite a challenge. The COVID-19-related recession has forced many companies to withdraw their guidance. And no analyst can accurately forecast the impact of rolling.
