High Dividend Stocks
High dividend stocks can be a great investment choice for income-oriented investors. Choosing dividend stocks can also make sense for risk-averse investors as dividend-paying stocks are typically companies that are well-established and stable. In fact, one of the best ways for a company to communicate stability is through regular dividend payments.
What are Dividends?
A dividend is the distribution of a portion of company earning to its shareholders. Dividends provide a means for a company to pass part of its profits to its shareholders. A company might also choose to pay dividends in the form of additional stock distribution. The dividends a company pays can be at a fixed rate (preferred dividends) or based on company performance (common dividends). While companies are not obligated to pay dividends, dividend payments can make a stock a more attractive investment.
How to Find High Dividend Stocks
The best way to find high dividend stocks is through the use of a stock screener. Some of the parameters you might want to include in your filtering for good, high dividend paying companies are:
While you can obviously build in more parameters to filter based on your own specific investment strategy, these should give you a nice list on which you can conduct additional research.
What it Means when a Company Stops Paying a Dividend
The payout of dividends is at the complete discretion of a company’s board of directors. The threat of a dividend cut or the elimination of a dividend entirely is often seen as the admission by the company that its business conditions have changed. The stock price is likely to suffer as a result.
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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.
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