Dividends4Life: Bullish on High Yield Dividend Stocks

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Bullish on High Yield Dividend Stocks

Posted by D4L | Wednesday, November 16, 2011 | | 0 comments »

Looking for high dividend ideas with bullish upside potential? Stocks that pay out dividends can be wise investment decisions, especially if you plan to hold the stock for a long period of time. But using dividends to supplement income requires some thought as to what dividend yield might be suitable, and what levels of risk are acceptable. It’s important to remember dividends are not future guarantees.

Yields above 7% may verge on unsustainable. Consider a rapidly growing stock price. If the price escalates from $15 to $50, a 12% dividend may become too much money for a company to pay out and the company is apt to change its yield. But if the yield stayed close to a healthy 2%, there would be less risk of unsustainable payouts or the company adjusting to lower yields. The higher the share price, the greater the returns. The same is true of the opposite. For that reason investors who appreciate a high yield stock also consider the company’s value and growth potential.

Source: NASDAQ

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