Buying and holding dividend stocks is a proven way to build wealth over time. And dividend yield is one of the key metrics that investors use when deciding which dividend stocks to buy.
The dividend yield is a ratio of how much a company pays in dividends each year relative to its stock price. In general, the higher the yield the better, but investors have to be careful to watch for yield traps. This can occur when a company offers a high-yield dividend that isn't sustainable based on the company's fundamentals.
One way to avoid a yield trap is to look for companies that have a stable history of paying, and ideally, growing its dividends.
High-yielding dividend stocks aren't likely to make a list of the best-performing stocks. Those slots are reserved for companies that offer more growth. However, these stocks will frequently deliver a total return that is on pace with the broader market. A stock's total return includes stock price appreciation and dividend growth.
However, like any investment, you want to make sure you're getting the best bang for your investment dollars. The good news is that with just $1,000 of available capital, you can build a significant position in some high-yield dividend stocks.
That's the focus of this special presentation. In some ways, this list will read like a greatest hits list; there's nothing wrong with that. When you're looking for income, stability is paramount and that means there's something to be said for the familiar.
Click the "Continue to Slide #1" button to view the first company.
