Dividends4Life: Dividend Stocks for Safety and Yield

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Dividend Stocks for Safety and Yield

Posted by D4L | Thursday, August 04, 2011 | | 0 comments »

In economic times like these, safe dividend stocks that produce high yields are good buys. This segment of the investment sphere allows you to get a slight return on investment and wait for the market to heat up again. A good place to start looking for stocks like these is to find large-cap companies that have given decent, consistent dividends for years. These companies will offer a much safer investment than trying to predict the rise and fall of stock prices in a manic market. Dividends are indicative of how much cash the company has on hand, so a company with a lot of cash can sustain dividend payments in the short term.

Dividends are paid with cash, not earnings or income. To truly find a great dividend stock, a company must have stable earnings stemming from competitive advantages in the industry to keep this cash coming in. A good metric to judge a company on is ROA since it includes cash in the equation. ROA can tell how good a company is at turning its investments into profit.

Source: Seeking Alpha

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