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.
Bank of Nova Scotia: A Solid 6.8% Income Opportunity
A High-Yield Stock You Likely Haven’t Considered In today’s ultra-low-interest-rate environment, savings accounts pay next to nothing. But that doesn’t mean you can’t earn a decent income from banks. Check out Bank of Nova Scotia (NYSE:BNS), for instance. BNS is.
Earn Double-Digit Yields Outside of the Stock Market?
These Little-Known Income Investments Pay Reliable Retirement Income I know from talking with investors that many are struggling to generate enough retirement income. The root of the problem comes down to a lack of savings. The slow extinction of corporate.
5 High-Dividend Stocks for October 2020
These Income Investments Pay Dividend Yields up to 10.5% If you’re like me, then you’re probably upset by the recent plunge in yields on income investments. In a bid to prop up the U.S. economy, the Federal Reserve slashed their.
DCP Midstream LP: This Overlooked 15.6%-Yielder Could Be an Opportunity
A High-Yield Stock You Likely Haven’t Considered It’s not easy being an investor in the energy sector these days. With a massive recession and a huge tumble in oil prices, many energy companies have been struggling. And, even though the.
3 Top Dividend Stocks Poised to Hike Their Payouts in October
These Top Dividend Stocks Will Likely Increase Their Payouts to Shareholders If I’d told you in January that the world would be on the verge of an economic depression, the stock market would trade at all-time highs, and the government.
General Mills, Inc.: Dividend Growth Is Back!
Reliable Income Stock Just Resumed Dividend Growth Income investors like companies that raise their payouts every single year. The reason is two-fold: first, continuous dividend hikes are a sign of strength in the underlying business; and second, if a company.
Is Williams Companies Inc’s 7.8% Yield Safe?
Can You Trust Williams Companies Inc’s Distribution? I trust most high-yield dividend stocks like I’d trust Wesley Snipes to do my taxes. Most of the high-yield names struggle with declining cash flows, tight profit margins, or high debt loads. And.
Lumen Technologies Inc: This 9.7% Yield Is Hard to Ignore
Looking for High-Yield Stocks? This One Could Be Special Income investors love large-cap stocks because most of them have established market positions. However, because large-cap stocks are so well-known, their shares have already been bid up, meaning they don’t offer.
Annaly Capital Management, Inc.: Can Investors Count on This 11.9% Yield?
1 Double-Digit Yielder to Think About Due to the role that the mortgage industry played in the 2007 to 2009 financial crisis, mortgage-backed securities (MBSs) may not have the best reputation in the investment world. However, mortgage real estate investment.
Kimberly Clark Corp’s Profits Keep Powering Higher
Kimberly Clark Corp Profits Rise on Higher Prices When Kimberly Clark Corp (NYSE:KMB) hiked prices by more than five percent to offset rising commodity costs, something unexpected happened: shoppers barely noticed. Kimberly Clark Corp’s unit volumes actually increased two percentage.
