5 Ways to Find the Best Long-Term Dividend Stocks
We love dividend stocks because they pay us now. But hey, I'm greedy. And when I research income plays, I want more than just those payouts.
I'm looking for price gains, too. Give me a dividend with a stock that could potentially double, and we're talking.
These types of stocks are rare, but they're not impossible to find. They tend to share five key dividend double characteristics. Let's discuss them now.
Dividend Key #1: Annual Dividend Growth
The core trait of an excellent long-term dividend holding is dividend growth, for numerous reasons.
For one, dividend growth is a pretty sure sign that the underlying company has the financial fortitude to pay the bills. Once a business starts a dividend program, there's only three directions for the payout to go:
- If the company is in trouble, they pull back on (or suspend) the dividend.
- If they're unsure about the future, they'll keep their dividend level.
- And if they're confident about their ability to churn out profits, they'll split more of that wealth with shareholders through increasingly fatter dividends.
Also vital to shareholders: Dividend growth means (obviously) more income. That means, rather than stretching for questionable stocks with fat current yields, you can jump into high-quality stocks with OK current yields, knowing that your yield on cost will plump up over time.
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