I think it’s fair to say that most investors have one simple goal: to find stable income in an unstable market, which is not always easy because of the yield traps out there. You never want to be in a situation where you’re buying solely based on a mouthwatering dividend only to find that the yield is skewed by a one-time payout or by a plummeting share price. One way to enjoy some peace of mind is to purchase stocks with an excellent dividend history. That’s a great sign that the company is committed to rewarding its investors and that maintaining its status as a trusted source of dividend income is an important goal.
Your next step should always be to make sure it can justify the high yield — whether it can support future payouts at the same (or higher) level based on what I would call high-quality business fundamentals. In other words, there’s a lot of trust in the management team and plenty of confidence in their strategy, which is absolutely essential. Here are two such stocks that have a 20-plus year dividend history AND are able to support the high payout with strong earnings and organic growth: AllianceBernstein Holding (AB) and Capstead Mortgage (CMO).
Source: InvestorPlace
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