There are 422 dividend paying stocks in the S&P 500 Index, but not all are created equal. To use a job analogy, some jobs offer a good upfront salary and stability in income, however, upside growth is limited. While other jobs may have lower starting salaries, they make up for it with growth opportunity and, in some cases, unlimited upside through bonuses or commissions. Which job is more appealing to you?
So which type of dividend stock is right for you? Well, back to the job analogy, you may ask yourself which “job” mentioned above would make you happier at this point in your life; stability and low risk or a moderate current income with attractive growth opportunities? Generally, if you want lower risk and higher income, utilities are usually a good bet. However, if you want moderate income with growth then dividend growth stocks may be best for you.
Source: Memphis Daily News
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