4 High Dividend-Paying Stocks Worth Betting On Right Now
Zacks Investment Research | Mar 05, 2019 07:02AM ET
Regular dividend paying stocks always attract more investors as these act as a steady source of income. Most of the time, cash dividends return more than what can be earned from deposits in savings accounts.
Hence, while selecting dividend stocks, investors generally focus on dividend yield (annual dividend per share/stock’s price per share) as this reflects the percentage return on the invested amount. Higher the yield, higher the chances of choosing that stock.
Nonetheless, as the dividend yield is based on the stock’s price performance, lower share price indicates higher yield, making the stock attractive.
But before buying such a stock, one must ensure that it is not a dividend trap. Decline in the company’s stock price may be on account of certain fundamental weaknesses, and if those persist, there is a high chance of further price decline.
Also, one must take into consideration the company’s debt levels. With global corporate debt of a whopping $13 trillion at the end of 2018 (per the Paris-based Organisation for Economic Co-operation and Development data ) as well as higher interest rates, dividends might fall if corporates begin to conserve cash to service debt.
Additionally, several macroeconomic factors, including slowdown in China’s economy, trade tension and uncertainty pertaining to Brexit could lead companies to conserve cash. This, in turn, might result in the firms maintaining the current dividend levels or even slashing it.
Picking High Dividend Paying Stocks
Based on the above-mentioned factors, it’s not wise to pick stocks just based on dividend yield. A handful of other factors must also be taken in to consideration before taking any investment decision. One way is to take the help of the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.