Dividend stocks offer a bounty of advantages over non-dividend stocks, which makes them attractive long-term holds. The obvious difference is that dividends provide a hedge during a downturn. The average yield of the S&P 500 is just over 2%, and while that won't negate a stock market correction lower, it's better than nothing. The two more important advantages of dividend stocks are that they usually imply a healthy business model and they can be reinvested to supercharge your long-term gains. Companies typically won't pay a regular dividend to investors if they don't believe their business model is on solid footing. By a similar token, being able to reinvest your dividends over the long run can allow you to buy more shares of dividend paying stocks, which yields bigger payouts, and even more shares. This compounding pattern is what lends to rapid wealth creation.
The thing about dividends is that investors can be lured solely based on yield, which isn't necessarily a good thing. As investors, we want the highest yield imaginable so we can boost our reinvestment potential. But yields can rise because stock prices are falling. If investors aren't able to decipher whether a high yield is the result of a healthy shareholder return policy or a struggling business model, there could be problems. With this in mind, I figured we'd take a brief look at four safe stocks with healthy dividend yields north of 5%. By "safe," I mean companies with below-average volatility and proven business models that won't leave you sleepless at night: GlaxoSmithKline (NYSE:GSK), AT&T (NYSE:T), Corrections Corporation of America (NYSE:CXW) and HCP (NYSE:HCP).
Source: Motley Fool
Related Articles:
- What Determines A Dividend Stock's Yield
- 7 Dividend Stocks Yielding Over 3%, With Tiny Payout Ratios
- Warren Buffett's Secret To 50% Returns
- 7 Undervalued, Big-Name Stocks To Consider For Your Dividend Portfolio
- 7 High-Yield Energy Stocks Growing Their Dividends
4 Safe Stocks With Dividend Yields Above 5%
Posted by D4L | Tuesday, June 14, 2016 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
At times like this, it is tempting to jump on a bandwagon and buy up the growth stocks, aiming to capitalize on the broader trends. But is t...
-
Looking back on the year, it has been quite remarkable. The coronavirus has wreaked havoc on people's health and caused governments to i...
-
There are some dividend aristocrats which have not only maintained but increased their dividends for over half a century. Having survived ev...
-
In today’s near-zero interest rate environment, it’s been tough for investors looking for yield. There are many high-yielding dividend stock...
-
Three high dividend stocks to buy now feature a business development company (BDC), a national real estate investment trust (REIT) and the o...
-
This past year has been the ultimate stress test for dividend stocks. Some companies failed miserably as they either slashed or suspended th...
-
Dividend stocks are a great choice for investors looking for a regular income stream. The best dividend stocks offer a growing payout in add...
-
The dividend-paying cleaning stocks to buy now amid the COVID-19 pandemic should benefit from heightened sanitary expectations by consumers ...
-
Rather than subject themselves to this risk, savvy investors can stabilize their portfolios by taking positions in reliable dividend growth ...
-
The best dividend stocks can generate excellent long-term returns. Even better, investors can buy high-quality dividend stocks when they are...

0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.