With interest rates still near all-time lows, yield-starved investors are looking to stocks as a way to provide income from their investments. As a result, when seeking out investment income, it's incredibly important to look beyond the headline yield numbers and focus on the fundamentals supporting those payments. With that in mind, here are some key strategies on how to find the best dividend stocks.
Figure out how well those dividends are covered. Companies that pay cash dividends first need to come up with that cash. Look for a solid balance sheet. A balance sheet looks at what a company owns and what it owes. Check on its dividend history. Although the past is no guarantee of the future, when it comes to dividends, what it has done in the past tells a lot about how committed a company is to rewarding its owners. Understand how the business makes its money. Companies that reliably pay dividends tend to either be structured in a way that requires them to pay dividends. Quality is at least as important as quantity.
Source: Mooresville Tribune
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