High-dividend stocks sound like an obvious winner. You get a large dividend payment on a periodic basis that you can choose to take straightaway or roll over into further stock purchases in the company. What's not to like? Stocks that pay the highest dividends are not necessarily the best choice. There is more to the story than just a simple percentage or dividend yield. Let's drop back and take a more fundamental look at dividends in general.
Companies that are at the top of the dividend yield rankings are almost certainly not going to be able to sustain those dividends over time. If a company is making enough income to afford regular 10% dividends, constantly paying out 10% of the share price, are they investing enough money back into the business to maintain their growth rate? Few companies enjoy that sort of profit margin and when they do, they don’t usually enjoy it for long.
Source: Fox Business
Related Articles:
- Optimizing Your Asset Allocation
- Dividend Growth Stocks Are My Conviction
- All Investing Involves Risk
- 7 Dividend Stocks With Room To Increase Their Payout
- High-Quality, Low-Risk Dividend Stocks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Over the years, few companies have served income investors better than the S&P 500 Dividend Aristocrats. To become a “Dividend Aristocra...
-
There is a company that’s doing exactly what you want to do: lending to venture growth stage businesses in the tech sector. Better yet, that...
-
First, and perhaps the most obvious, is that being able to enter biotech stocks at a cheaper price — assuming the companies are not fundamen...
-
Cheap valued stocks with high yields will never go out of style. I could go on about the powers of compound interest, but I think we're ...
-
This has got to be the most interesting high-yield opportunity to watch this earnings season. The company was already one of the most genero...
-
Owning high-quality, high-yield dividend stocks is the most effective way for investors to achieve outsize returns over the long run. But wh...
-
If we can buy stocks in good companies that are also at discounts to their peers in the market, we’re on the right track toward better retur...
-
Owning dividend stocks can be a great way to not only grow your portfolio but also get a tax-effective cash return on your investment. Wheth...
-
Having a few trusty dividend stocks that you can approach with a "set it and forget it" mindset takes a lot of the stress out of i...
-
Investing in real estate can be lucrative. That is, if you don’t mind taking on a second job as a landlord. Would-be investors need solid cr...
0 comments
Post a Comment
Post a Comment